House of Representatives
14 August 1952

20th Parliament · 1st Session

  1. House of Representatives
  2. 20th Parliament
  3. 1952

Mr. SPEAKER (¥on. Archie Cameron) took the chair at 10.30 a.m., and. read prayers.

page 292

TELEPHONE SERVICES

M*. ALLAN ESA SEE. - On the 26th February I asked the Postmaster-General whether his department would bear the cost of replacing telephones that had been destroyed by bush fires. The Minister undertook to consider all aspects of the matter. Is he now in a position to supply an answer to my question?

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– It. wa.S necessary for my department to make investigations in both New South Wales and Victoria, where extensive bush fires had occurred, to ascertain the probable extent of claims. It has now been decided that the department will bear the cost of replacement of telephones that were destroyed by bush fires in instances where the instruments were not covered by insurance.

Mr CRAMER:
BENNELONG, NEW SOUTH WALES

– Is the PostmasterGeneral aware that for several years past his department has been unable to install telephones in the premises of people who Iia ve applied for them in North Ryde and Gladesville in my .electorate, because of a shortage of cable and other equipment? Notwithstanding that he has given approval for the provision of several public telephones in those districts, their installation, also, has been delayed for the same reason. Does the Minister know that parts of those areas present a very dangerous fire risk during the summer periods? Recently, ten new telephones were installed in the experimental depot of the Joint Coal Board in the area. Will the Minister take steps to ensure that private persons shall enjoy equality with government instrumentalities in the provision of telephones.

Mr ANTHONY:

– The provision of private and public telephones, and other facilities, in many suburbs of Sydney, is very difficult because of various shortages. The allocation of telephones is decided on a priority basis. As the Joint Coal Board has a very high priority, the Postal Department gives special consideration to applications received from that organization for telephones. At the same time, however, the importance of such facilities to private citizens is fully realized. I shall have the honorable member’s representation examined to see whether anything can bo done to assist the residents of the districts that he has mentioned.

page 293

QUESTION

PAPUA AND NEW GUINEA

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Has the Minister for Territories seen a circular issued by the Students Association of the Australian National University in an attempt to raise organized protests against his refusal to allow an anthropologist from the university to enter the Territory of Papua and New Guinea ? Will he inform the House of the principles that govern the issue of permits to enter that territory, and of the reason why a permit was refused in this case?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I have seen the circular to which the honorable gentle man has referred. As he has said, it is an attempt to raise an organized protest against my decision to exclude from the Territory of Papua and New Guinea an anthropologist attached to the Australian National University. As honorable members are aware, a system requiring people to obtain permits to enter the territory has been in operation for more than twenty years.

Mr Ward:

– Why did the Minister refuse to issue a permit in this case?

Mr HASLUCK:

– I shall explain that to the House in a moment. During that period of twenty years, two principles have been applied. First, we have always tried to keep out of the Territory of Papua and New Guinea persons who, because of lack of means or weakness of character, might constitute in the territory something in the nature of a class of poor whites. Honorable members will appreciate that the existence of such a class would be. an embarrassment to us. Action in the present case was not taken under that heading and I want to say quite categorically that, in this instance, there is no reflection on the personal life or private habits of the gentleman in question. Secondly, we have always refused to admit certain people to the territory because we do not wish to have in the territory, persons who, by their activities, might impede or distort our work, or in other way3 prevent Australia from discharging fully its responsibilities to the native peoples under trusteeship. The gentleman in question, by reason of his political affiliations, definitely comes within that class of person. All powers with any responsibility for the administration of dependent territories and colonial areas have realized in the last two or three years that a great deal of mischief can be done and much harm done to native peoples by persons holding certain views who go to such territories with the express purpose of trying to distort and misrepresent the work that is being done for the advancement of the native peoples. In this case, certain information was placed, before me. In view of that I felt that I was completely justified in refusing to issue a permit to this gentleman in order to avoid the risk of damage being done to our work in New Guinea. In fact, I should have been lacking a sense of responsibility if I had issued a permit. The honorable member for East Sydney, in a kind of supplementary question-

Mr SPEAKER:

– Order ! The Minister must not reply to the honorable member for East Sydney.

Mr HASLUCK:

– The circular that the students have distributed suggests that we should disclose the sources of our information. All honorable members know quite well that the rule first laid down by a former Prime Minister, Mr. Chifley, and adhered to constantly by this Government distinctly provides that the source of information in such matters shall not be discussed in public or made the subject of statements to this House. I can only assure the House that the information we received about this particular applicant was such that we did not feel justified in taking the risk of allowing him to enter New Guinea.

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I desire to ask the Minister for Territories a question which is based on the fact that a former administrator and spokesman for Christian missions in the Territory of Papua and New Guinea has expressed the view that under the policy of the Minister for Territories there has been a sharp turn against the interests of the natives in the territory. I ask the Minister whether the objection to the visit of a certain anthropologist to the territory is genuinely based on the belief that his activities would be subversive to the sovereignty and the national welfare of Australia and is not due to the fear that he might reinforce other opinions which have been adverse to government policy?

Mr HASLUCK:

– With all due respect to the honorable member for Fremantle, I think that his suggestion is ridiculous. The Government has already granted permits to a number of anthropologists from the Australian National University and other institutions to visit the Territory of Papua and New Guinea and there are probably about half a dozen working there now with, the encouragement of the Government. The premises on which the honorable member based his question are completely untrue. There has been no change whatsoever in the policy of this Government in relation to the welfare of the natives, and because of our constancy in following this policy the Government has taken the action to which the honorable member referred.

page 294

QUESTION

HOUSING

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

– Is the Minister for Works in a position to state the number of houses imported into Australia during the term of office of the present Government? Can he also say whether the importation of houses has been discontinued ?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I am afraid that I cannot say, offhand, how many houses have been imported. Most of the importations have been made by the State governments. If the honorable member wants detailed information I shall try to obtain it for him from the State, governments. The importation of houses has now ceased. Four or five months ago orders for houses that had been placed by the Australian Government were cancelled wherever it was possible to do so. However, houses that were already on the water or in respect of which contracts had reached an advanced stage, have yet to be landed. They number approximately 300. No further houses will be imported.

page 294

QUESTION

HEALTH AND MEDICAL SERVICES

Mr FAILES:
LAWSON, NEW SOUTH WALES

– Can the Minister for Health say whether the means test operates in hospitals under the control of the New South Wales Government? How will the Australian Government’s new medical scheme assist New South Wales?

Sir EARLE PAGE:
Minister for Health · COWPER, NEW SOUTH WALES · CP

– The means test, operates in respect of outpatients’ at all public hospitals in New South Wales. In fact, the procedure that has been adopted in respect of outpatients at the Canberra Community Hospital is based on the New South Wales system. Under the new scheme, medical benefits and hospital benefits are confined to those provided under the various insurance schemes. Under the old scheme, New South Wales received approximately £2,000,000 a year. Under the new proposals, that State will receive approximately £4,500,000 a year, compared with £2,500,000 if 70 per cent, of the -patients were insured. If the New South “Wales Government had accepted the scheme that was submitted to it a year ago last January, its hospital revenues would have been better ofl to-day by £3,750,000.

Mr HAMILTON:
CANNING, WESTERN AUSTRALIA

– Can the Minister for Health inform me whether the hospital and medical benefits scheme is operating in “Western Australia in societies recently approved by this Government? If it is so operating, can the Minister say with what success it is functioning?

Sir EARLE PAGE:

– Two societies, catering for both hospital insurance and medical benefits insurance, are operating in Western Australia, and I understand that they are expanding very rapidly. At the present time, of course, the only insurance organization which receives a Commonwealth contribution is the hospital benefits organization. The medical benefits organization is operating entirely under its own steam. Despite that, 1 understand that it is making very rapid progress.

page 295

QUESTION

DIPLOMATIC CORPS

Mr MULLENS:
GELLIBRAND, VICTORIA

– Is the Minister for the Interior aware that a distinguished scholar, poet, mystic, academician, man of action, veteran of two wars, exolympic athlete, crack skier, politician, and cabinet minister, said recently, “ I have found an ounce of experience worth a pound of hook learning” ? Is the Minister aware that that statement might be taken to refer to the method of selecting members of the Australian Diplomatic Corps and others who have, the honour to represent this country abroad? Am I right in assuming that, in that statement, there is some hint from the aforesaid distinguished gentleman that the method of selection will be changed, and that he will use his undoubted influence to ensure that persons who represent us abroad shall have that ounce of experience that is worth a pound of learning?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– My answer to the honorable member’s question is, “ No names, no pack drill”. I cannot think of the. person to whom the honorable member refers.

page 295

QUESTION

DEMINERALIZATION OF SALT WATER

Mr FREETH:
FORREST, WESTERN AUSTRALIA

– Can the Minister in charge of the Commonwealth Scientific and Industrial Research Organization give the House any information about the progress being made with the cheap distillation of fresh water from salt water? Is there any likelihood that the technical discoveries announced overseas will be useful in the lower rainfall areas of Australia, where there are supplies of salt water ?

Mr CASEY:
Minister for External Affairs · LP

– The Commonwealth Scientific and Industrial Research Organization has been following the work that has been done in the United States of America for a considerable time on the demineralization of saline and other waters. A company, called Ionics Incorporated, in the United States of America appears to have developed a process for turning salt water into potable fresh water. The Division of Industrial Chemistry in the Commonwealth Scientific and Industrial Research Organization has been working on this problem, so far as it can in Australia with the resources available to it at the moment, and it has been in contact with Ionics Incorporated in an effort to get particulars of the process. I know that the honorable member for Forrest is keenly interested in this matter, because of the great salinity of areas in the south-west portion of Western Australia, and I point out to him that a process of this sort, which apparently depends largely on electrolytic processes, depends, in turn, upon the availability of cheap power. Therefore, I do not necessarily hold out any strong hopes that the process will be immediately applicable to Australia, but I assure the honorable gentleman that the Commonwealth Scientific and Industrial Research Organization will continue to investigate the matter. If anything of a practical nature develops, I shall be glad to inform the House of it.

page 296

QUESTION

PENICILLIN

Mr EDMONDS:
HERBERT, QUEENSLAND

– “Will the Minister for Health inform me whether it is a fact that a complete embargo has been placed on the importation of penicillin into Australia, and that supplies of this indispensable drug are to be drawn from the Commonwealth Serum Laboratories? Has it come to his knowledge that certain sections of the medical profession and chemists have expressed the fear that this embargo will result in a shortage of penicillin, because they believe that the Commonwealth Serum Laboratories have not the physical capacity to provide all of Australia’s requirements of the drug? Will the Minister give to the House a complete assurance that the embargo on the importation of penicillin will not have that effect to which I have referred and that s ample supplies will be available for our requirements ?

Sir EARLE PAGE:
CP

– I am continually in touch with the medical profession and with the advisory committee that handles this matter, and I have not received any complaints of the kind to which the honorable member has referred. I assure him that the position is always under proper review.

page 296

QUESTION

QUESTIONS

Mr J R FRASER:
ALP

– My question is addressed to you, Mr. Speaker, and I hope that it is in order. Will you consider whether the question addressed by the honorable member for Oxley to the Minister for Territories a few minutes ago was of a kind which, while it avoids the ruling that names must not be mentioned in questions, does by specifying the occupation of a person referred to, clearly identify him in a community as small as this one is? Will you also consider whether the answer to such a question could, by innuendo, besmirch the character of the person referred to?

Mr SPEAKER:

– There may be something in what the honorable gentleman contends in his question, but the same consideration would apply to the question asked shortly afterwards by the honorable member for Gellibrand. My own personal view in this matter, and one which I hold very strongly, is that every question asked in this House should be placed on the notice-paper. We should then know where we are. In addition, Ministers would know what they have to answer and could prepare proper answers. As I said on Tuesday last, if I complied with the .Standing Orders - and I think that possibly I should do so, just as a test - question time would not last more than ten minutes on any day.

page 296

QUESTION

PUBLIC SERVICE

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– Is the Postmaster-General aware that many employees of his department, both male and female, feel aggrieved because leave without pay will not be granted to them by the department to enable them to join the Permanent Military Forces? Can the Minister say whether it is a fact that, under existing conditions the Public Service Board cannot regard service in the permanent forces as service within the meaning of the Public Service Act? If that is so, does the Minister subscribe to the principle that where an officer desires to respond to the call to enlist in the permanent forces, before joining any arm of the services he must first resign his position with the Postmaster-General’s Department? If the position is as I have outlined it, has the Government considered the matter as it now affects Commonwealth public servants generally and officers of the Postmaster-General’s Department particularly?

Mr SPEAKER:

– The question is obviously one that should go on the notice-paper.

Mr ANTHONY:
CP

– I rather agree with you, Mr. Speaker. The matter is determined by the Public Service Board and not by the Postmaster-General’s Department. I think it is manifest that a person who joins a branch of the Permanent Military Forces is no longer eligible to be on the staff of another permanent service, such as a Commonwealth department.

page 296

QUESTION

TEXTILES

Mr JACK:
NORTH SYDNEY, NEW SOUTH WALES

– The management of a textile factory in my electorate has asked me1 to ascertain from the Minister for Supply whether it is correct, as it

Las been told, that the Government is obtaining uniforms which have been manufactured in Japan. Will the Minister inform me of the facts and whether that statement is correct?

Mr BEALE:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I remember answering a similar question previously in the House. Since this Government has been in office no uniforms have been obtained from Japan.

page 297

QUESTION

EMPLOYMENT

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– Is the Minister acting for the Minister for Labour and National Service in a position to advise the House of the number of industries which are working short time throughout the Commonwealth to-day, and also of the number of industrial employees who are working short time? If he is not able to supply such information immediately, will he ascertain it and advise the House accordingly? Will he also convey such information to the learned counsel briefed to present the point of view of the Commonwealth in the case now before the Commonwealth Court of Conciliation and Arbitration in Melbourne, in order that the court may be fully apprised of the fact that many industries are working short time and that work is not available for all Australians, even with a 40-hour week ?

Mr SPEAKER:

– Order ! The honorable gentleman is making a statement. This iS another question which is obviously one for the notice-paper.

Mr McBRIDE:
WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954

– I am not in a position to make available the information for which the honorable member has asked, but I shall endeavour to obtain it for him.

page 297

QUESTION

ARMED FORCES

Mr OPPERMAN:
CORIO, VICTORIA

– In view of the recent most gratifying reports on the protection afforded in warfare by what a.ve known as armoured vests, will the Minister for the Army state whether they have been introduced as standard equipment for Australian troops in Korea? If they have not, is the Australian Army conducting experiments in order to test the suitability of these vests for issue to Australian forces ?

Mr FRANCIS:
Minister for the Army · MORETON, QUEENSLAND · LP

– Armoured vests are not yet standard equipment in the Aus tralian Army. Very extensive experiments are being conducted by United States and United Kingdom forces with these vests and I am advised from time to time of the progress made. Our troops recently used some of them on patrols, but their reports concerning them have been rather conflicting. If they are ultimately adopted as standard equipment by the British Commonwealth Division in Korea to which Australian troops are attached they will be adopted by our forces. The progress that has been made in the development of these vests is substantial, but I do not think that it is sufficient to warrant their immediate adoption as standard equipment.

page 297

QUESTION

TITANIUM

Mr GRAYDEN:
SWAN, WESTERN AUSTRALIA

– Is the Minister for Supply aware that there are substantial deposits of titanium in Western Australia and that this metal is of great importance for defence purposes? Have any steps been taken to develop the Australian deposits of this mineral?

Mr BEALE:
LP

– Apart from the use of titanium in the paint industry it has been rather a Cinderella among the metals, but quite recently it has become important to defence owing to its use in high-speed metals and, particularly, in connexion with the manufacture of jet aircraft. There are substantial deposits of this metal in Australia. Some of them are on the east coast and there are promising deposits in Western Australia. The Bureau of Mineral Resources recently made a survey of deposits of this metal and I shall furnish the honorable member with a copy of the bureau’s report.Primarily, the development of the reserves will be a matter for the States. Recently, there has been a development in the Commonwealth field in that the British Ministry of Supply has asked my department to undertake, some special research into the use of titanium as an alloy. That matter is still in the developmental stage; but I have uo doubt that we shall, shortly be able to do what the’ British Ministry of Supply wishes us to do, and I believe that that research will be a very important factor in. the development of titanium in Australia.

page 298

ORDER OF BUSINESS

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I move-

That order of the day No. 1, Government business, be postponed until a later hour this day.

Mr Calwell:

– I take it that the Minister has moved for the postponement of private members’ business?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Yes, “ Grievance Day “.

Mr CALWELL:
MELBOURNE, VICTORIA · ALP

.- The Opposition has no objection to the course proposed by the Vice-President of the Executive Council (Mr. Eric J. Harrison), but such concurrence in what the Government intends to do is not to be taken to mean that we agree to postpone indefinitely these particular items. We desire an opportunity at some time before the session ends to discuss at least one important matter on the notice-paper which stands in. the name of the Leader of the Opposition (Dr. Evatt).

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– -in reply. - I think that the honorable member for Melbourne (Mr. Calwell) has mistaken me. To-day we seek to postpone “ Grievance Day “, not private members’ day. The House will have a unique opportunity for the next twelve days to discuss any grievance, or supposed grievance that any honorable member may have against the Government. Therefore, the suggestion that the honorable member for Melbourne should have some assurance that further time will be allowed for such discussions is completely untenable. When we dispose of the budget we shall revert to our normal procedure and shall give the honorable member and his colleagues an opportunity to say everything that they wish to say.

Question resolved in the affirmative.

page 298

QUESTION

BUDGET 1952-53

In Committee of Supply: Consideration resumed from the 13th August (vide page 281), on motion by Sir Arthur fadden -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and Allowances, £13,500 “, be agreed to.

Upon which Dr. Evatt had moved, by way of amendment -

That the first item be reduced by £1.

Mr CLARK:
Darling

.- The budget represents an annual stock-taking of the nation, and it should contain a record of what the Government has done in the past year and what it proposes to do during the current year. The presentation of the budget is an important event because it should give to the people an assurance of good service and security and bring development and progress in its train. It should foster employment instead of causing unemployment. It should give stability to business instead of causing business to languish. It should not retard development, as this budget will retard development by causing the closing down of many public works and the restriction of essential developmental activities. A budget should also give adequate help to pensioners and others who receive social services benefits. Such persons are not, receiving adequate assistance to-day. Pension payments have lost value during the last year, and the Government has not made provision in the budget to restore that lost purchasing power.

The Prime Minister (Mr. Menzies) made a lengthy speech to this committee last night. If talk could solve problems, Australia would have no problems to-day because the right honorable gentleman is one of the nation’s leading public speakers. He is always entertaining to the nth degree, but he has achieved very little in the task of governing the country. He is incapable of putting into practical effect the undertakings that he gives so glibly in this chamber. Therefore, he has fallen down on his job. The economic decline in Australia should engage our earnest attention during this debate. This Government has destroyed the confidence of the community in its legislators. Consequently industry is languishing and unemployment is increasing. Figures that were published to-day show that total payments of unemployment benefit in Australia have increased by nearly 90 per cent. during the last month. Because the economic structure of the nation has been weakened, people are fast losing their life savings. Many workers are unemployed. Their savings are being rapidly exhausted and, before long, they will be forced to eke out an existence on the miserable pittance that is provided by the Government. Many Australians have invested their savings in homes and, unless the Government revives the economy, large numbers of them will be faced with foreclosures and will lose those investments. Rising prices are depleting the purchasing power of incomes, and savings are being dissipated in that way also. Investments in government bonds are losing their value. Such bonds to-day are quoted on the market at £S6 or £SS. The Government, if it has any regard for its good reputation as a borrower, should emulate the private borrower and foster confidence in itself amongst the people. Confidence could be restored immediately by allowing government bonds to be used for the payment of taxation, probate duty and other government charges. The adoption of this procedure would release adequate reserves of money for further investment. Under present conditions, however, a person who has invested money in government bonds is likely to suffer from a considerable loss of value on the part of those securities before they mature. The Government could put value back into bonds by accepting bonds as well as cash for the payment of taxation and other dues.

Considerable losses are being sustained in primary industries because of the uncertainty that exists in the minds of many primary producers. Industrial enterprises are losing money, and the savings of the people are being dissipated. Spending power has been reduced, with the result that unemployment is growing. Only by maintaining the spending power of the people can the prosperity of business be assured and employment provided for all. The present economic situation is serious, and the budget ha3 done nothing to improve matters. Public works are being closed down, although in1 this young country much developmental work is necessary in order to make it possible to carry a larger population. The country cannot be developed if the Government refuses to make credit available for public works.

In private enterprise it is the practice to pay for capital works out of loan moneys, and not out of current revenue. The same practice should be followed by governments. For our national works, money should be made available by the Commonwealth Bank or raised by loan. The Government should not be budgeting for the expenditure of £100,000,000 on capital works. The people should not be taxed to pay for capital works at a time when they are faced with unemployment and economic insecurity. If the Government were to use loan money and bank credit to finance public works it would be able to reduce taxation by the amount that it is now spending on such works out of revenue. The national credit should be used for the benefit of the people. I cannot see that there is anything wrong with an economy in which the people have sufficient spending power.

When I entered this Parliament in 1934, depression conditions still prevailed. Public works were not being undertaken because, we were told, there was not enough money. During the last year or so, public works undertakings have languished because, we have been told, there is too much money in circulation. In the budget before this one we were informed that taxation had to be increased in order to take surplus spending power out of the hands of the people. There seems to be something wrong with an economy in which public works cannot be undertaken, first, because there is no money in time of depression, and later, because there is too much money in circulation, and the prosecution of public works would aggravate the inflationary tendency. It is time that an effective plan for public works development was initiated in this country. Before the 1949 general election, the Government promised to undertake public works of major importance. Yesterday I asked the Treasurer (Sir Arthur Fadden) what had happened to the Government’s proposal to make £250,000,000 available for public works and particularly for country development. The Treasurer said that my question was based on false premises. I believe that it was based on false promises. I have studied the policy speech that was made in 1949 by the present Prime Minister. On page 17 of the published speech the right honorable gentleman said -

Over a period of five years, we sl,all raise loans, totalling £250,000,000, the interest and sinking fund of which will be provided out of the petrol tax. The amount to be raised and spent each year will be conditioned by the availability of mon and materials. Its general administration will be under a National Works Council. The work will include feeder roads; soil conservation; the development of rural housing, embracing the construction of groups of workers’ homes in seasonal labour areas; flood prevention; the provision of water, light and power. . . .

The Treasurer spoke a few days later. Apparently be was not satisfied with the statement that had been made by the Prime Minister, for he made one of a more lavish character. He said -

We propose a gigantic and vigourous scheme of rural development. This will not be like the mirage of blueprints held before your eyes by the socialists as a remote antidote to some future depression caused by their own policies. It is a- positive programme. Tt will be implemented HERE and NOW to make Australia great and prosperous and replace present days of scarcities with an era of abundance. For this, we will raise £250,000,000 by public loans. . . . The interest and sinking fund will be. met. by annual appropriations from the petrol tax. The Commonwealth will assume sole responsibility for financing the scheme, which will be administered by a special Minister through a National: Works Council, comprising representatives! of the Commonwealth and the States.

The Treasurer continued, and his words were published in big black letters -

No repayments of national development loans will be required from any State or local authority for moneys received or spent under this scheme.

I do- not know whether the Treasurer was knighted for one of those statements. The point is that the statements were made by the Prime. Minister and’ by the Treasurer.. I am convinced that they were false promises, and that my question in the Parliament this week was not based on false premises. If ever there was a time to start with the vast programme which was promised by the leaders of the Government, that” time- i< now, when the country is faced with widespread unemployment. The expenditure of £250,000,000 that was promised by the Prime Minister and’ the Treasurer would- do much to restore- confidence to the national economy. Development of country centres is languishing because of the absence, of good* roads- and other- facili- ties. If we are to attain full rural development and production we must make sufficient loan money available to local governing authorities to enable them to improve roads and other facilities in country areas. The Commonwealth Bank, which could provide the money for that purpose, is tied by the restrictions placed upon it by the Government. The primary producer has a noteworthy task to perform, but he can accomplish it only if the requisite facilities are provided to enable him to do so. He is being “ taken for a ride “ by this Government. The prices of all the requirements of the primary producer have been forced up by increasing costs which, in turn, have forced up the price of primary products. Unless appropriate action is taken to remedy this situation our economic system may collapse in the not distant future. High production costs will render our primary products unsaleable on the overseas and local markets. Under the administration of the Labour Government primary producers were able to sell their commodities at very much lower prices than those that now prevail on the home, market and at satisfactory and profitable! prices on the world market. When 1 first came into this Parliament in 1934, the chief topic of discussion was the rehabilitation of the wheat industry. A royal commission, which was established to investigate the industry, reported that the heaviest impost placed upon the wheat-growers was represented by interest charges and inflated land values. To-day, land values are extremely inflated and other costs and prices have risen in consonance with the rise in the price of land. Unless the prices of primary products can be reduced to a reasonable level, primary producers face the prospect of bankruptcy.

Food production is of prime concern to any government in this country. Australia must provide adequate food for therequirements of not only our own people but also the peoples of other parts of the world. The export of primary products must be increased to enable us to pay for overseas goods and commodities that we need to maintain our standard of living. The decline of primary production has brought about a reduction of exports, and our overseas balances are rapidly being depleted, with disastrous effects upon our economic structure and the welfare of our people. Food is a very important factor in defence. During World War II. Australia’s major role was that of providing food for the allied nations. We supplied food to meet the requirements of not only our own people but also the British and American forces in the Pacific area. Should another war occur Australia would be called upon to play a similar’ role. A great deal of the money provided for defence purposes is being, wastefully expended. Of the £200,000,000 which the Government proposes to expend on defence this year, it should set aside £100,000,000 for the development of food, production as a vital clement in- war preparedness. If it did se Australia would- be able to play a much more noteworthy role in the defence of the democracies than it can achieve under the Governments defence programme.

The Government- should give more attention to the development of primary producing areas* in order to- increase food production. V>ery little’ tax relief will be given to primary producers under this, budget. For many years, ails primary producers’ enjoyed the benefits, of the averaging system. Originally; the- average was determined in respect of: a three-year, period. A Labour government? subsequently extended that period to - five years- because it realized that owing- to- droughts and seasonal conditions- the’ income’s’ of; producers varied considerably from- year to year. T.his Government; however;, has denied the b’enefits-of.the averaging-system to a large proportion- of. primary producers who, last year.,, were obliged to pay not 01111 tax, in respect - of current income, but also. provisional tax in respect of income of’ the, following, year.. The result waa that the, tax- liability of many, primary producers amounted. to as much as 25s. in the;£l. That was obviously unjust. Tho Prime. Minister, in the course of his speech: last night, , said that a Labour government : had. introduced- provisional tax. That - is - true ; . but . under. Labour’s procedure there’ was a back lag of. tax in respect of. three months, the-: payment of which* was- spread over- a. period of three, years.

The Government has decided to abolish land tax. The’ Prime Minister challenged members of the Opposition to say whether, if they were returned to office, they would re-introduce that tax. Speaking for myself, I say without hesitation that I am completely in favour of re introducing tha’t tax. The object of land tax- was to expedite the subdivision of large estates although up to date that objective has not been achieved to any great degree. In 1939, land tax- collections’ represented 5-£ per cent.- of the Government’s total revenue. In- 1942, the latest year for which relevant statistics are available, land tax was payable by 21,900 residents and’ 2,450 absentee land-owners. The latter are reaping huge profits from their holdings in this country) and, in most instances, such properties are far in excess of what is recognized to bc a home maintenance area. Land tax should bo retained in order to- break up those large estates and thus enable more Australians to go on the land. Official figures which I have cited on previous occasions in this chamber and to which the Leader nf the Opposition referred, show that fewer persons are engaged in primary production in Australia at present than iii 1948. That development is due largely to this Government’s policy of encouraging’ the’ restoration df large estates.- The full application’ of the and tax would have the effect, of forcing large’ holders to sell some of their land. That’ would enable’ additional men to engage’1 im primary production; and, in time, more’ primary produce would become’ available for export and’ to meet our own requirements. The “Government should’ increase rather than abolish the land tax. In the financial year 1940-41 about £3,500,000 was collected in land ‘tax. The- yield- from- the tax’ to-day should be about double that amount/ In that yea-r the banks paid land tax of £353,774. As -they should be paying , ap.proximately twice that’ amount in this financial year, the Government’s decision to abolish land tax will be- of considerable advantage to th’em. In the same year the big retail i stores _ paid land tax qf ‘ £367,000. Again, the benefit ‘that will ‘flow ‘to them as a result of’ the abolition pf the land tax will ‘ be about double that- amount.

This applies, also, to land-owning companies, as distinct from individuals, which paid £489,000, and brewers, who paid £214,000. In view of our depleted social services it is shocking to find that the Government intends to relieve the wealthy land-holders and other exploiters of this country of their obligation to pay land, tax of about £6,000,000 a year. That money could well be applied to the provision of additional social services. Almost daily I receive letters pointing out the plight of our pensioners as a result of the inadequacy of their pensions. The Government proposes to increase the age pension to £3 7s. 6d. a week. The percentage that that rate bears to the basic wage is much lower than was the percentage when Labour was in office. The tendency should be to improve rather than to reduce the standard of living of our pensioners. I urge the Government to retain the land tax and to apply the yield from it to an increase of social services payments. If the matter were put to the people by referendum I am sure that they would vote for the retention of this tax. As I h av, already stated, its full application would result in the further development of this country and would greatly increase primary production. In many country areas farmers have insufficient land on which to settle their growing sons, with the result that many young rural worker? are leaving the farms in order to take jobs with shire councils and other bodies. If, by the breaking up of big estates, more land could be made available for settlement, many of these young men would return to the land” and thereby rural production would be increased. I stress that I am 100 per cent, in favour of the retention of the land tax.

The DEPUTY CHAIRMAN (Mr. Bowden). - Order! The honorable mem ber’s time has expired.

Mr JEFF BATE:
Macarthur

– The honorable member for Darling (Mr. Clark) has shown conclusively that the land tax has not achieved the purpose for which it was imposed, and that large estates have been accumulating for a number of years. Indeed, he charged this Government with the accumulation of large estates - in what manner, I do not know. He favours the retention of the tax on the ground that its removal will act as a deterrent to primary production. He claimed that the breaking up of large estates would result in more farmerssettling on the land, and that thereby the production of raw materials for export would be increased. I agree with that contention, but I could not follow his reasoning that unlessthe prices of primary products arereduced the farmers will face bankruptcy. The honorable member represents an electorate in which enormous amounts are. paid to the workers in theform of a lead bonus, in addition to their pay. Until this Government, came- te office those people were able to buy theirrequirements of butter at 2s. 2d. per lb. They should have been ashamed to continue on that basis in view of the poor conditions that then existed in the dairying industry. At that time most dairyfarmers received only about £8 a week for themselves. The average lead bonuspaid is approximately £15 a week. The honorable member has also> claimed that there has been a declineof primary production because of the policy that has been applied by thisGovernment. That is untrue. Theprimary producers of this country are now suffering as a result of the policy that was applied by the former socialist administration for more than eight years. A socialist government has been in officein New South Wales for eleven years. During that period it has provided little incentive to the primary producers toincrease production.

The honorable member for Darlinghas referred to the hardships of primary producers who have been called upon topay provisional tax. A3 the Prime Minister (Mr. Menzies) pointed out last night,, within a few years of the introduction by the former Labour Government of thesystem of provisional taxation in relation to primary producers many of them were called upon to pay more in taxes in a year than they had received income. This Government has modified the- provisional system of taxation that was introduced by. theChifley Government, and. has embodied in it the principle of self-assessment. This will enable the primary producers to makeadequate provision for the payment of their taxes and, in effect, will bring them into line with wage and salary earners from whose remuneration instalments of tax are deducted at the fountain head. We are trying to increase primary production and to reverse the policy of thu Labour party which was enunciated by the Leader of the Opposition (Dr. Evatt) in a broadcast speech that he delivered on, I think, Australia Day this year. In the course of that speech, the right honorable gentleman said that we want mon; money in Australia to build factories and houses. The effect of the application of that policy would be to entice from work on the land young rural workers who wanted to marry, hecause the only houses that they could secure then would be situated in industrial areas. That is something that the honorable member for Darling has criticized.

The Government has produced a budget that is satisfactory to primary producers. They know that, in common with other people in the community, they must pay taxes. They realize that they must pay for security and for social services, but they realize also that, if taxation had been maintained at a high level, it would have been difficult to produce an incentive budget. I believe that the reaction of primary producers to the budget is that the Government has taken the only proper course open to it, and has steered neatly between the rock of inflation caused by too much bank credit and the rock of high taxation that would cripple the business community. The Opposition says that it agrees with the Financial Times, of London, that this is an inflationary budget, but it says also, that the Government has failed to offer enough incentives. That criticism proves that we have been able to steer between the two rocks. Primary producers recognize that, by orthodox financial methods, the Government is safeguarding the economy of the nation.

The budget is in conformity with our policy of trying to revive the rural industries of this country, which, for eight or ten years, suffered under blows delivered by Labour-Socialist governments in this Parliament and in the States. The primary producers know where their friends are, because 43 of the 69 members of the Government parties represent rural electorates. Those electorates, represented by rural men, decide the composition of the Government of Australia. Everything in which the Labour-Socialist Opposition in this Parliament believes is the opposite of that in which the primary producers believe. The primary producers believe in loyalty to the British Commonwealth, loyalty to British Christian democracy, loyalty to their mates, in doing a decent day’s work and in trying to produce more goods. The Opposition believes only in the sacred militant trade unions, which it places above everything else. The Labour party, when in power, succeeded in putting those unions into a most favorable position. The present Government parties have been in power for only two and a half years. We have not yet had sufficient time to retrieve the position in which this country was placed by the LabourSocialist Government, which crippled and strangled our primary industries.

In two years, our export income has fallen by £400,000,000. The fall of the price of wool was responsible for three-quarters of that decrease. Apart from wool, our income from exports of surplus rural production - our exports consist mainly of surplus rural products -has fallen by £100,000,000. Some years ago, Professor Giblin, talking about this matter, referred to what he called the rural multiplier, and said that every £1 produced by primary industry was worth £4 of the national income. The position now, because we have improved our manufacturing techniques to some degree, although not enough to enable us to compete with other countries, is that every £1 produced by primary industry is equal to a little over £2 of the national income. Each £1 worth of surplus rural production tint we export will enable us to import goods of an equivalent value. About 70 per cent, of our imports consists of raw materials for our secondary industries. The Monthly Review of Business Statistics states that producers-‘ materials for building and construction purposes represent about 5 per cent, of our imports, producers’ nia.teria.ls for rural industries .4 per cent., producers’ materials for manufacturing purposes 36 per cent., munitions and war stores 2.6 per cent., transport equipment 26 per cent., road vehicles and parts 13 per cent., and railway equipment, vessels and civil aircraft 1.6 per cent. All those materials are needed to keep this country going and to provide employment. We pay for them from the income that we earn from our exports. In my electorate, clothing factories require cloth to make garments, hut it cannot be got because of the fall of our export income.

Every £1 of our export income that we do not need to pay for imports goes into what ave called our London funds. Those funds are the principal source of liquid finance in this country. When funds in London fall, so do funds in this country. At this stage, two important requirements for Australia are finance and raw materials with which to provide employment. We can obtain both finance and raw materials by increasing our rural production to such a degree that we can pay for all the imports that we need. The Government is striving to bring that about. We disagree entirely with the view of the Labour party on how it should be done. Let me refer the com,mittee to what has happened in New South Wales, where a Labour government has been in power for eleven years. The papers upon national income and expenditure for 1951-52 show that in that year all the main components of the national income increased, except farm income, which decreased by about £350,000,000, or by about 45 per cent. The fall of wool prices was responsible for a portion of .that decrease. The greater part of the quantitative decrease occurred in New South Wales. Tn the nine months ended the 31st March of this year, exports of lamb from. New South Wales totalled 89S,000 lb. compared with 2.409,000 lb. during the corresponding period of the previous financial year. The decline of the value of those exports was from £150,000 to £68,000. Thus there was a drop of more than one half in the value of the exports, and of more than one-third in the quantity. Exports of mutton fell during the same period from 2,947,000 lb. to 794,000 lb., and th.j value dropped from £98.000 to £42,000. Those figures are the latest available. Exports of flour declined from 507,240,000 lb. to 394,655,000 lb., which represented a reduction of income by more than £1,000,000. The total exports of wheat and flour from New South Wales fell from the equivalent of 23,967,000 bushels to 12,836,000 bushels, which represented a fall of value from £19,77S,000 to £11,397,000. There will be a further decline this year. The figures for wool are significant. In the first nine months of the financial year 1950-51, 351,100,000 lb. of wool, valued at £166,342,000. was exported. For the corresponding period of 1951-52, the quantity was 267,600,000 lb., and the value, £90,643,000. The task of rebuilding export production is principally in the hands of the States and must remain there. The diversification of climate and soil in Australia is –itch, and distances are so great, that rural production must be in the hands of thos? who are closest to primary producing areas. That means that control of rural production must remain with the State governments, and, if possible, administration must be further localized by th-j appointment of district committees, members of which will have a financial interest, in ensuring that the work of agricultural officers shall succeed.

Exports of dried fruits from Nen South Wales during the nine month*’ period ended the 31st March, 1952, totalled 5,605,000 lb., compared with 9,000,000 lb. in the previous corresponding period. Butter exports dropped from 4,765,000 lb. to 562,000 lb. Even those figures are misleading because, although butter is exported at certain times of the year, on balance New South Wales is a butter importing State. For many year.-., under the administration of Labour governments, New South Wales has produced less butter and. cheese than it has consumed. The present Labour administration, like its predecessors, has no real sympathy with primary producers. “M renders only lip service to the man on tinland. It pays a charming gentleman t,-/ go round the country districts “ selling “ the Labour Government to the primary producers. I refer to the New South Wales Minister for Agriculture. He is t very nice fellow, and is very popular wit!, the few farmers who are doing well, but hn is presiding over the. destruction of agriculture in New South Wales. The Department of Agriculture has 32 employees in what is called its “Extension Services Branch “. Those people apparently spend much of their time sending out paragraphs to country newspaperabout what a good fellow the Minister isWhile this is happening, New South Wales is buying butter from Victoria find Queensland.

The decline of wheat production, too, is serious. New South Wales, which once was one of the greatest flour exporting States in the world, will shortly have to import flour from other States at an enormous cost for transport, or bread will have to he rationed to the public. In addition, of course, flocks of poultry and herds of pigs and cattle will have to bc reduced because of the lack of stock feed. That is the prospect facing New South Wales after eleven years of Labour administration.

What is the position elsewhere in Australia? While wheat acreage in New South Wales has fallen from -.:0O0,000 acres to 2,600,000 or 2,700,000 acres, Victoria has been able to increase itf. wheat production from an average of 34.500.000 bushels in the pre-war years to ‘ 43,300,000 bushels in 1951-52. You will appreciate the significance of these figures, Mr. Temporary Chairman, because T know you are interested in ensuring that adequate supplies of stock feed shall be available for the poultry industry. You are. a Victorian, and I congratulate you upon the increase of wheat production that has been achieved in that State, while plantings in New South Wales, in spite of its vast potentialities, have declined seriously. The Labour Government of New South Wales has been letting down the workers, whom it claims to be its supporters.

In Western Australia, the production of wheat has increased from 28,900,000 bushels annually before World War II. to 49.000,000 bushels. In Queensland, there lias been an increase from 4,200,000 to 8,700,000 bushels. On the other hand, whereas before the war wheat production in New South Wales averaged 53,600,000 bushels, to-day the figure is only 43.300,000 bushels. I know that it will be said that wheat production has declined in South Australia also, but that State, under the administration of its able Liberal Premier, has increased its output of oats, barley, and other grains, and has established a splendid industrial record.

The record of the dairy industry in New South Wales is particularly bad. In the last five years preceding World War II., New South Wales produced an average of 331,000,000 gallons of milk. By 1950-51 that figure had been reduced to 297,400,000 gallons. That was before the drought, which this year will cause a further drop of 30 per cent. The story in the other States is vastly different. Milk production in Victoria increased from 404,200,000 gallons a year pre-war to 446,200,000 gallons in 1950-51, whilst the increase in South Australia was from 63,5000,000 gallons to 83,900,000 gallons, and in Western Australia from 40,300,000 gallons to 51,700,000 gallons, in spite of the difficulties that have been encountered by the farmers in that State.

The Labour Government of New South Wales is entirely responsible for the decline of dairy production in that State, because of its failure to expand its extension services, and to keep transport costs down. Let us examine transport costs in New South Wales. I cite these figures in support of my contention that New South Wales has let the rest of Australia down. If we are once again to see the spectre of unemployment, it will be simply because the government of New South Wales has failed to maintain production. In New South Wales, it costs £2 a ton to send wheat over a distance of 50 miles. In Victoria, the freight is 12s. 5d.,, in South Australia it is 16s. 6d.., and in Western Australia it is 20s. 7d. In other words, the cost in New South Wales is three times a.9 high as it is in Victoria. I understand that, since the figures that I am citing were issued, a small rise has occurred in Victoria. To transport wheat over 200 miles in New South Wales costs the growers 63s. a ton, compared with 25s. a ton in Victoria, 29s. in South Australia, and 33s. in Western Australia. ‘

I come now to superphosphate, an essential item in primary production an.4 a commodity which in other countries would be subsidized.

Mr Beazley:

– The Labour Government did subsidize it.

Mr JEFF BATE:

– Then this is something that we too might do. I ‘point out, however, that the Chifley Government, of which the honorable member for Fremantle (Mr. Beazley) was a supporter, subsidized butter to the consumer, but did not subsidize its production. That is where a big mistake was made. In other words, the Labour Government paid the subsidy to its own supporters, but failed to subsidize producers. I ask honorable members to consider the disparity between railway freights for the transport of superphosphate in the various States. The charge is 23s. a ton in New South Wales for every 100 miles, 15s. 6d. in South Australia and 10s. 4d. in Victoria. The cost of carrying a sheep by rail is 37d. in New South Wales, 25d. in South Australia, 24d. in Western Australia and 1 6d. in Victoria. I understand that when the representatives of Victoria attended the meeting of the Australian Agricultural Council recently to discuss food production targets, they were astounded, because of the good record of their own State, to discover that Australian production as a whole was declining. New South Wales had dragged down the Australian total to such a degree as to outweigh the contributions of all the other States. Years of Labour administration would cripple primary production, cause a loss of income from the export trade, and reduce the output of basic materials upon which employment in so many industries depends. The present Government has a magnificent record of achievement in rural production, but action must be taken to tie up the loose ends. One fact is obvious. The Government of New South Wales should be changed.

This year, the Commonwealth has made a notable contribution to the campaign for increasing food production by the provision’ of £200,000 for extension services. I urge the Minister for Commerce and Agriculture (Mr. McEwen) to consider the advisability of reorganizing his department with a view to relieving it of responsibility for the marketing and distribution of primary products and allowing it to concentrate its efforts upon production itself. The Department of National Development provides an excellent example of what can be achieved by concentration in that way. Since that department was established, coal output has risen from 10,000,000 to 15,000,000 tons a year, and the output of steel has also increased enormously. The explanation is that the Government is concentrating upon the production of those basic materials. Bottle-necks in the coal and steel industries have been removed, and losses of man-hours have been reduced from 14 per cent, to 4 per cent, as a result of the introduction of secret ballots for the election of trade union officials, strong administration and a complete lack of sympathy for the Communists. I appeal to the Minister for Commerce and Agriculture to examine the reorganization of his department in accordance with my suggestion. The activities of the department should be concentrated upon means for increasing rural production, in co-operation with the States, by the provision of money and man-power. Immigrant labour could be allocated to the rural industries. The extension services should be of great assistance to primary producers by increasing their efficiency. Agricultural research is in the capable hands of the Commonwealth Scientific and Industrial Research Organization and the State Departments of Agriculture. The purpose of the extension services is to disseminate the fruits of the research to the farmers, and to “ sell “ them ideas for increasing production. At the moment, that work is not being done ‘because an insufficient number of agronomists and agricultural instructors is available. That position should be remedied. I express the hope that the grant of £200,000 for extension services this year will be increased in succeeding years.

In conclusion, I repeat my request to the Minister for Commerce and Agriculture to shear off from his department all this clogging business of marketing and distribution. The honorable member for Lalor (Mr. Pollard), who was the previous Minister for Commerce and Agriculture, will probably remember that he was bogged down in fooling about with marketing problems and that kind of thing when he should have been persuading the Labour party and the Department of Commerce and Agriculture to concentrate upon increasing rural production.

Mr BEAZLEY:
Fremantle

.- The honorable member for Macarthur (Mr. Jeff Bate) made a good case for the Government in the course of most of his speech, but I was astonished at what was a deviation from the standard of sincerity that he has always shown in the chamber when he replied to my interjection. He stated that a subsidy should be paid on superphosphate. The Labour party, when it was in office, rightly or wrongly maintained a subsidy of £2 10s. a ton on superphosphate for many years. The honorable member suddenly realized that fact as he was speaking, and said, “Well, perhaps we should restore the subsidy”. When he realized that his statement was an admission against his own ease and in favour of the previous Government, he started to argue on the assumption that it was not true, and accused the preceding Labour’ Government of having subsidized consumers but of not having subsidized producers. The exact reverse is the truth. A subsidy was paid on. superphosphate and on bags. The great mistake of the present Government has been to maintain the structure of Labour party prices control on what the farmer sells but not to maintain the Labour party structure of prices control and to subsidize what the farmer buys. The honorable gentleman’s contention that the Labour party considered a return of £8 a week sufficient for the dairy farmer ignored the fact that at that time the basic wage was approximately £5 a week. I cannot recall whether such a basis of remuneration was considered ; but such a policy, on the basis of the present basic wage, would give to the dairy farmer a return of £17 or £18 a week, which would probably be a flattering return to him compared to what he is getting to-day under the administration of this Government.

We can get into a completely dishonest situation when we attribute everything that happens in a State or country at a given time to the political party in office. I can say that the Queensland Labour Government is a splendid government for the primary producer, because wheat production has been doubled in that State. I can, if I like, say that the Queensland Government is the most evil government for the primary producer, because the export of meat from that State is down to nothing at the present time. Will anybody say that either line of argument is honest? Will any one contend that the doubling of wheat production is due to the Premier, Mr. Gair, and that the disappearance of the meat export trade is also due to him? If you were to go to the north-west portion of Queensland, the lie would stick in your throat. That country is now suffering from the ravages of the most terrible drought in its history.

The honorable member for Macarthur made one statement that is profoundly true, and it underlies the whole dispute of every Premier whether he be Labour, Liberal or Country party, with the present Prime Minister (Mr. Menzies). The honorable gentleman said that the State governments have a vital role in food production. In the northwest portion of Queensland, thousands of cattle are dying from the effects of the drought. The Government, very rightly, invited us to assemble in the Senate club-room, and made available one of its experts to tell us the solution of the recurrent droughts. He stated that the remedy was the construction of railways, so that in periods of drought the cattle could be brought down into the Channel country. What is the whole complaint of Mr. Gair against the present Government? It is precisely that the publicworks programme, including railway construction, that he wishes to undertake is persistently described- by the Prime. Minister as irresponsible. If it be, true, as the honorable member for Macarthur has said, that the States have a vital role in stepping up primary production, every public work that they wish to undertake is vital. It is not true to say that many of the public works undertaken, or proposed by the Commonwealth, have a greater significance than have the public works programmes of the States. Even the Liberal party Premier of South Australia, Mr. Playford, was not satisfied with the treatment he received at the recent conference of Commonwealth and

State Ministers ian Canberra,, and bis v iews are on record.. This Governmnent must recognize’ the importance of the role , of the States in the food production programme.

Let its no-w- consider certain objective facts. I shall be interested to hear whether the Vice-President of the Executive Council (Mr. Eric J. Harrison1) will deny them. I ain not attributing them, at the moment, to the governments in power during the two periods. I am merely making a comparison, lt is an objective fact that when the Chifley Government was in office, 1,000,000 mon were demobilized from the services and there was no unemployment. It is also a. bold fact that no such great problem faces the Government at the present time, yet there is unemployment. Another objective fact is that when the Chifley Government was in office 400,000 immigrants were brought to this country, and inhere was no unemployment. It is also a fact that, to-day we have circumstances such as the scandal at Bonegilla. I shall not argue whether or not the two respective governments have been responsible. I merely note at the moment that those are the facts. I wish to make this passing reference to Bonegilla. It is disgraceful that, for nine or ten weeks, persons at the camp have been allowed to rot in idleness. They put to the Government a request that they be given work 04 if they are not to be given work, that they be given pay. If it be the policy of the Government to leave them there without work and without pay, they should be repatriated to Italy. I submit that their request was morally correct. Ft is a striking commentary on the alleged shortage of rural labour that farmers apparently do not want the services of these people. The same position also appears to exist in respect of Dutch and British immigrants.

Throughout the whole term of office of the so-called inefficient Chifley Government our sterling balance constantly rose. It may, perhaps, be argued that that increase- was not due solely to the policy of that Government. Nevertheless, it coincided with that policy. The Government did not stop it from increasing ; nor did it cause unemployment. The destruction of our sterling holdings in London has been a great feature , of the last year of office of the present Government. Throughout the whole period of the Chifley Government foreign indebtedness was reduced. Any Commonwealth Bank publication, i indeed even the publications of the Government itself, such as treasury papers,, will show that to be so. This Government claims that its policy of borrowing, abroad, thereby putting us into foreign indebtedness, is one of its achievements which we should admire. We were informed by the honorable member for Macarthur some moments ago that a theological phenomenon exists in this Parliament. Apparently the honorable member believes that all who sit on the right of the Chair are Christians and that those on the left do not belong to a Christian civilization. He said that, the members of the Opposition stand for trade unions, the character of which, I inferred from his words, could only be described as evil, subversive and disloyal. He asserted that he stands for the British Common wealth of Nations, apparently implying that honorable members on this side of the eh amber do not do so. I point out to him that it was a Labour government which made a gift of £70,000,000 te relieve distress overseas. Forty-five million- pounds of that sum was a gift tn Great Britain. Honorable members may remember that day in and day out the Government was assailed on the ground that the amount of the gift was inadequate. Since the change of government very little work of an international humanitarian character has been done by the Commonwealth. However, I do not wish to argue that matte]’, except to say that that £70.000,000 was a gift which constituted a claim on our exports. We do not speak of gifts any more, nor do we talk about giving away any of our produce, because it does not exist to be given away. That is another point of contrast between the present Government and the Chifley Government.

It cannot be denied that .every loan which the Chifley Government floated was oversubscribed, whereas the present Government is unable to get its loans filled. During the era of the Chifley Government, inflation was sufficiently checked fo« the basic wage to increase by only 8s., from £3 17s. to £4 5s. a week, during the six years of the wal’. In the post-war years, until the collapse of the Chifley Government, the basic wage increased from £4 5s. a week to £5 15s. a week. It is unnecessary to comment upon the progress of inflation since then. When the members of the present Government parties were putting forward their arguments to the electors in 1949, they did not say that the vicious Chifley Government had left an inflationary problem with which they could not cope. They characterized the then level of costs as representing an inflationary situation which they proposed to improve. They did not say that they might not be successful. It was definitely to- be done. By comparison with what has happened since the fall of the Chifley Governmnent, a very slow rate of inflation occurred during the regime of that Government. Inflation is increasing very rapidly at the present time.

Although I do not necessarily hold that the agreements made in London in respect of the prices of rural products were wise, at least they were associated with the policy of trying to control the prices of everything that the farmer purchased, not merely his superphosphate and bags, which were subsidized and controlled. Nor was the freight situation as bad then as it is now. Everything which the. farmer purchased as an ordinary consumer, such as the clothes he wore, was subject to prices control. One of the mistakes made by the present Government is the maintenance of half control. Why did it not have the courage to come out with a complete policy of laisser-faire, which some of its supporters seem to advocate?

I think it is fair to say that the Prime Minister (Mr. Menzies), in the course of his speech last evening, contended, that the economic policy of the Australian Labour party is unfair and unsound. I do not know that we were unsound when we demobilized approximately 1,000)000 men and women without causing unemployment, nor were we unsound when we provided for the absorption of 400,000 immigrants, also without unemployment resulting: Is it contended that the previous Labour Government was unsound because every month our savings in London increased? Is it contended that this Government is sound because it has destroyed those savings? I suppose that that is logical - to a lunatic ! Do honorable members opposite suggest, that the Chifley Government was unsound because it reduced foreign debts and that this Government is sound because it has increased them? Was the Chifley Government unsound because its loans were oversubscribed, and is this Government sound because its loans are undersubscribed ? Was the Chifley Government unsound in checking inflation, which to-day is rampant?

I wish now to turn from the contrasting situations of the two regimes and to speak of some of the points that may be made on the whole subject of bank credit. The Prime Minister referred to an injection of £60,000,000 of bank credit into the community as being implicit in. the speech of the Leader of the Opposition (Dr. Evatt). Such an amount would be approximately equal to the £45,000,000 which this Government injected into the community last year, because of the rate at which the purchasing power of money is deteriorating. In other words, if it be desired to give next year an injection of credit comparable to £45,000,000 this year, it will be necessary to inject approximately £60,000,000. But the conditions om which bank credit can or cannot be expanded need to be considered. I do not regard as adequate the generalization that if it i3 possible to find money in time of war it is also possible to find it in time of peace. It is not true to say that .war finance rests merely on the expansion of credit. Waa? finance rests on physical controls’ as well. When expansion of credit was responsible for financing Allied Works Council projects at Darwin, for example, such expansion would have been meaningless had there not existed the power to force labour and materials’’ to go id Darwin. No one wants to s«se that power being exercised to-day The only sound- statement” ever made by the” author of the Dou’glas credit” system i* that what is physically possible is also financially possible. However’, he does not seem to- think that the converse- that what is physically impossible is also financially impossible - also applies. If it is possible to’ buttress a production policy by means of physical aids, then credit can be safely expanded. If a production policy cannot be buttressed by physical aids, credit can be expanded only when there is a reserve of unemployed labour and materials. The moment all labour and materials are employed, further expansion of credit becomes unsound, with the proviso, on which the business world bases its complaints against the Government, that whilst the Government has adopted a credit restriction policy, certain economic events are forcing people to seek more credit, whether that be sound or unsound from an abstract point of view. Those people sell their goods at a certain price. The cost of labour and materials has been rising so rapidly that their profits have been eaten into. In many cases the returns have become slight. Due to the fact that the profit is less per unit produced they wish to produce more, which necessitates expansion of their industry. In other words the existing situation of rapidly rising costs tends to force more businessmen to seek further credit. If credit is denied to them their industry stagnates. Some businesses will be carried on for a very low return but some will go out of existence. The disappearance of certain businesses has been a feature of recent times.

The Prime Minister argues, in effect, that labour becomes available to a farmer if a factory in the city closes down. It would be just as logical to contend that when the’ textile industry of Manchester was ruined by the restriction of imports by the Australian Government, the workers of that city could be re-employed in the armament industries of Birmingham. How would they obtain housing in Birmingham? Capital has quicksilver mobility. It goes from one place to another as fast as the decision to invest it is made. But labour has not quicksilver mobility. Its capacity to become employed depends on whether it can be housed and on whether or not it can adapt itself to an industry in which employment is offered. Are the 500 men who recently lost their positions in the paper industry now employed as agricultural labourers? Of course not! The Prime Minister might do well to forget generalization of- this type. Last year, the Government held that it was imperative to have a great budget surplus in order to check inflation. Because Chifley budgets did not have large surpluses sometimes, they were declared by honorable members opposite to be inflationary. What has invalidated that line of reasoning? If a surplus was imperative to check inflation last year, why has it not become imperative this year? The committee is entitled to an explanation of that point.

The subject of social services has not yet been discussed by honorable members opposite. I presume that they would not deny that the Government promised that the purchasing power of pensions would at least be maintained. That promise has not been carried out. I do not think that pensioners are given very much consideration by the Government. Personally, I consider that the whole of our reasoning on retiring ages needs revision. A retiring age of 65 is complete nonsense. Retirement should be dependent on medical fitness and should not be fixed at an arbitrary point in time. My father worked until he died at the age of 72 years and I am sure that he would have died seven years earlier if he had retired at the age of 65 years. At no stage of his life did he wish to retire. However, a lot of invalid and mentally afflicted people have the illnesses which come with old age. Their situation is becoming more and more desperate. In many cases they are the occupants of rooms. There has been a tendency in the States to relax the control of rents and, as a consequence, they have tended to rise. Some of these people, after paying their rent, are left with less money than they used to have, at a time when they need more. Under the Government’s proposals, after they have paid 25s. for a room they will have £2 2s. 6d. left. They will be in a desperate position, particularly if they are single. Many of them are widows and widowers. I do not desire to make any party political capital out of the plight of the aged and unemployed, but the committee should ensure that they shall not be overlooked, because their position is deteriorating rapidly. I again ask the Government to examine pensions levels and their relationship to the cost of living, which is still rising.

The Treasurer has not introduced a miracle budget. I do not suppose that it is the most disastrous budget that has ever been presented, but it is obvious that it will not combat inflation any more than did the last budget. Nobody can rightly argue that the last budget was successful in dealing with inflation. The Treasurer made himself appear ridiculous when, two days before the last basic wage increase was announced, he declared that inflation had been held by the throat. The basic wage in Sydney rose by 12s. a week. It could, of course, be argued, that this was a smaller percentage rise than that which preceded it, but the actual rise was just as great. Inflation has steadily become worse and our international trade position is much worse. When the last budget was introduced the Government had in London great reserves which could be used to bring goods into our economy without paying for them with exports. Those reserves no longer exist. We have about £300,000,000 in London but it is a chastening thought that we spend at least £150,000.000 a year on shipping freights alone and that we import £120,000,000 worth of petrol each year. When we consider the rate of consumption of our imports the reserves in London look precarious.

According to the honorable member for Macarthur every fall of primary production in New South Wales is due to the action of the State Labour Government. I thought that that State had been affected by floods which had not been experienced in Western Australia. However, I have found that it is standard Liberal reasoning that everything that goes wrong when a Labour government is in office is due to socialism and that anything that goes wrong under a Liberal government is due to an act of God. I cannot reconcile that proposition with the honorable member’s thesis that most of the Christians in this chamber sit on the right of the Chair because, if that is so, they do not appear to receive the favours of the Deity to the extent that we would expect. The budget is unimaginative. It is not likely to do more to mitigate the effects of inflation than did the last budget, and the last one did nothing about inflation at all.

Mr DAVIS:
Deakin

.- Perhaps it would be wise in this discussion about a matter that will affect the financial state of the country, to consider the economy as a whole before analysing it and considering isolated sections of it. In that way we shall get all the parts of our economy in the proper perspective. It. is the responsibility of this committee to do just that. If we consider the events of the last financial year we shall find that there has been an increase of basic production. We shall find also that many of the shortages that we faced last year no longer exist, and that the housing problem, which is one of the basic problems of our society, has been tackled with some success - I say no more than that.

The population of Australia is about 8,500,000, and its area is about 3,000,000 square miles. Either we, or somebody else within our generation, must fully develop a great part of that 3,000,000 square miles which to-day is only partly developed. If we are to live as a. nation we must export, and, at the present time at least, we must export mainly primary products.

Conversation being audible.

The DEPUTY CHAIRMAN.- Order ! Private conversations among honorable members must cease.

Mr DAVIS:

– We must accept the f aci. that if, in the future, we are to continue to live as a community, we must encourage the development of secondary industries and the export of their products. It is an alarming fact that within the next decade or so this country will have a population of from 10,000,000 to 11,000.000. That will be an increase of our present population by 20 per cent, or 25 per cent. This responsible chamber must consider now the effects which such a population will have on our economy. What impact will an increase of that magnitude have upon our governmental services within the next ten or fifteen years? Obviously all those services which a responsible government is expected to provide, such as the facilities for transport and other amenities of civilization, must be increased by from 20 per cent, to 25 per cent. To all those who are acquainted with our transport system, and the lack of many of the services that are essential to the community, the thought of the necessity for such an improvement is frightening. However, it is a great responsibility that must be accepted by us in the near future.

If Ave consider the budget in its relation to the problems that face us, we shall find that its provisions will, in fact, reduce the impact of taxation both on individuals and on industry. It will increase in some degree - and I do not quarrel with the contention of the honorable member for Fremantle (Mr. Beazley) that it does not do this to a very great degree - the incentive to produce. By increasing the net income of the individual it will increase his power to purchase the increased production that will flow from such tax measures as we have taken. The Leader of the Opposition (Dr. Evatt) performed a remarkable feat of mental agility when he attempted to display the effect on the individual of a reduction of income tax. He referred to a person who in the last taxation year was in receipt of an income of £500 and who, during the present taxation year, because of increases of the basic wage will be receiving £600. He said that that individual would be in a worse position under the provisions of this budget than he was in last year. The right honorable gentleman devoted some time to the development of that line of argument. To say that his arguments were sophistry would be to flatter them, and the actual figures should be considered in order to indicate how wrong the right honorable gentleman was. In the last financial year, a man who received £500, and who had a wife and two children, would have had a net income of £490 9s. after paying income tax. In the present year, if he receives £600, he will have, after paying tax, a net income of £581 4s. a year. Therefore, he will have £90 15s. more during the present financial year than he had during the last financial year. If the light honorable gentleman claims that he is worse off under those circumstances I find it very difficult to follow his reasoning. A man without dependants who received £500 during the last financial year had £460 lis. left after paying income tax. If he receives £600 d urine the present financial year he will have £548 7s. remaining to him after paying his tax. Therefore he will be better off during the present year by £87 16s. To suggest anything else in the two cases that I have mentioned would be to argue against the facts which any one can ascertain very easily.

The Leader of the Opposition and his colleagues have argued very forcefully, but not so logically, about employment. This country needs not only full employment but also efficient employment. Nobody in this chamber, or, indeed, throughout Australia, will deny that we have not had both full and efficient employment for a good many years. Indeed, I c’onsider that to be beyond argument. The honorable member for Fremantle presented his case fairly, and argued logically, but I am afraid that we must differ on conclusions. He said that capital is fluid and flows from industry to industry or from place to place in accordance with the requirements of investment. He said also that labour is not so fluid, and does not flow so readily from industry to industry in accordance with the demands of industry. He illustrated his remarks by mentioning Birmingham and Manchester. I am not familiar with either city, hut I do know that both of them are thousands of miles from Australia. However, in the cities with which I am familiar the honorable member’s argument does not apply. I represent an electorate which is semi-rural. The townships in the electorate are 20, 25 or perhaps 30 miles from the centre of Melbourne. Any one who travels in my electorate will see every morning the little feeder buses coming from the country to the rail-heads packed full of young men and women who reside in these semirural areas. Almost all of those persons have been drawn from the essential task of increasing our supplies of foodstuffs. That is true of my electorate and I assume that it is true of other electorates. There may be some unemployment amongst those people at the moment, but the result will be that they will go back to the tasks that they left in order to secure high wages, shorter working hours and amenities in the cities. They W]l take up again the jobs for which they are best fitted and in which they can best serve the country. We all know that there is no 40-hour week in primary industries. That is one of the main reasons why young men and women have gone to the cities in order to find employment. The honorable gentleman went on to say that, when these workers change their occupations, they will change their places of residence and housing will have to be provided for them. But the truth is that the transfer will not add to the housing problem. Indeed, it will tend to lessen the pressure of the housing problem in our huge, sprawling cities.

The subject that I shall discuss now is of fundamental importance. Most of us talk of an expanding economy. In fact, the expression has become popular in the last few years. The truth is that we have been hampered by the application of the principles of a restrictive economy. That is not an unfair statement. We have spoken in terms of an expanding economy, as we should do in Australia, but we have thought in terms which we have been conditioned to accept, of a restrictive economy. There can be no hope of a prosperous future for Australia while we continue to accept those principles. This Government has been gradually breaking the bonds of restriction. To use a term that was made famous by the honorable member for Melbourne (Mr. Calwell), it has been gradually unscrambling the eggs that the socialist administration scrambled. The honorable member for Fremantle said that ‘t was the duty of a government to assist. The truth is that it is the duty of a government to provide the -amenities that make possible the standard of living that we all wish to establish in this country. It is the duty of a government to protect the people, both collectively and individually, against exploitation and hardship. It is not the duty of a government to attempt to control every phase of the private and economic life of the community. The honorable member referred to Darwin for the purposes of illustration, and said that nobody at present would wish to have the power to transfer men and materials to Darwin. He will probably find himself at variance with many of his colleagues on that statement of principle. We should consider the budget in the light of its probable effect upon the welfare of the nation. We have heard a great deal of talk about depression, particularly from the Leader of the Opposition.

Sitting suspended from to 2.15 p.m.

Mr DAVIS:

– The Leader of the Oppo-. sitionspoke at some length about depression policies, and the possibility of economic depression. His attitude was inconsistent with the responsibility of the Leader of Her Majesty’s Opposition in this Parliament. Indeed, the right honorable gentleman ignored the realities of the situation. We are at present confronted with problems which have arisen partly because of the restrictive policy which has been applied over the years, and which has produced an unbalanced economy. In the field of transport, every shire and municipality and city in Australia needs men, material and money for the provision of better roads and better transport facilities generally. Every shire and municipality is faced with the need to maintain and improve existing roads, and provide new ones. We have continued, wrongly I believe, the practice of tying allocations for this sort of work to the petrol tax. However, over the years, there has been an improvement in this regard, and the allocations have been progressively increased. I hope that in the near future a more realistic policy will be applied. If there is to be full and efficient employment, we must address ourselves seriously to the problem of providing better roads.

There is also a great deal of work to be done in the provision of sewerage, water systems, power and light in practically all parts of the country, and particularly in those new districts which have been developed since the end of the war. The provision of those services would fully occupy all our available labour force for a long time to come. If we are to prevent our already overgrown cities from sprawling still further over the face of the country we must develop satellite towns, and an enormous amount of work will be involved in doing so. Then there is the problem of undeveloped rural areas, such as those in the Northern Territory, Queensland and New South Wales. There will be an almost unlimited demand for men and materials if those areas are to be effectively developed.

One of the most significant features of the budget was the Treasurer’s statement that the Commonwealth proposed to hand back to the States power to levy income tax for themselves. I have always believed that unless governments accept responsibility for raising the money that they expend there must always be a direct threat to responsible and democratic government. Therefore, I was pleased to learn that, at long last, it was proposed to take effective action to restore full taxing powers to the States. I was also pleased to hear that the Government proposed to examine our banking legislation, and to bring down a bill during the current session designed to modify the restrictive sections of the 1945 act.

The honorable member for Fremantle (Mr. Beazley) is generally reasonable and fair, but he was neither reasonable nor fair when he referred to the financial administration of the Labour Government, and the effects of its efforts to control prices. He claimed that, as a result of those efforts, inflation had been prevented.

Mr BRYSON:
WILLS, VICTORIA

– That is quite true.

Mr DAVIS:

– Perhaps the honorable member who interjected believes what he says, but I am sure that the honorable member for Fremantle knows better. The truth is that, although inflation had been checked, it had not been stopped. It had merely been banked up, as any one with a knowledge of economics will agree. Treasurybills to the value of £220,000,000 had been redeemed out of the proceeds of taxation, and some of the spending power had been drawn off, but the demand for goods had not been satisfied. When the Menzies Government came into office, it found that the Treasury, so far from being full as some less wellinformed honorable members opposite seem, to think, was in reality fis empty as Mother Hubbard’s cupboard. That was admitted by Mr. Chifley himself, who claimed that he had merely applied the principles of orthodox public finance. Such development as had occurred had taken place without proper co-ordination. Houses had been built, but no roads had been made, no water supply had been provided, and no power or lighting was available. I do not unduly criticize the Labour Government for that, but the fact remains that the honorable member for Fremantle, when referring to post-war conditions, did hot describe the situation with his usual honesty.

When we are considering future rural development we have to recognize that one phase of it has to do with further development of areas already partly in production; whilst another phase has to do with areas which as yet have been very little developed, or have not been developed at all. In the Northern Territory alone there is sufficient developmental work to be done to absorb whatever surplus labour force there may be available now, or in the foreseeable future. I shall put several suggestions to the Minister for Territories’ (Mr. Hasluck), who has achieved much during the brief period he has held that portfolio. One way to develop the area effectively would be to establish smaller industries. I do not believe that large-scale plans, which are mostly theoretical, will produce anything there. I draw the attention of the Minister also to the needs of the southern area of the Northern Territory which is centred on Alice Springs. Principally it is devoted to cattle raising and an important feature of the area is that cattle can be fattened there. If private enterprise could be encouraged to establish an abattoir at Alice Springs, many of the problems that are associated with the development of the pastoral industry in the Northern Territory would be solved. By that means, thousands of pounds would be saved each year in terms of better quality beef and greater yield per carcase. The most pressing problems of the Northern Territory generally are associated with transport and communications, but in the north where there is water, the immediate problem is irrigation. If that were developed, millions of acres of land could be brought under cultivation. That land could produce foodstuffs for export as well as for the Australian market, and such a trade would help good neighbour relations. Any honorable member who has knowledge of the north of Australia and who has been to Darwin, should know that Darwin is only twenty minutes flight by fast bomber from the nearest foreign territory. That fact emphasizes the necessity for increased expenditure on defence. It is essential to Australia’s future and prosperity.

Mr MULCAHY:
Lang

.- The honorable member for Deakin (Mr. Davis) referred to the deplorable state of the roads in most of the Australian States. He could have gone further and informed the Government that plenty of labour is available to improve thu roads if the Government would only make money available for the purpose. No municipality in New South Wales can borrow from the Commonwealth Bank or the private banks for developmental works. I doubt if the Government wants full employment in Australia, but if it does, there is the opportunity to get it. Australia is spending an enormous sum of money on defence. All honorable members will agree that adequate defence is necessary, but a large proportion of the money that is set aside for defence is being spent on a campaign to recruit men and women for the services. That campaign has been an absolute failure, as the DirectorGeneral of Recruiting has admitted moi-‘.1 than once. It has failed because this Government has neglected the men who served in the last two wars.

Mr TuRNBULL:

– Did the Labour party assist the recruiting campaign?

Mr MULCAHY:

– Yes, definitely. Because of the high cost of living, the pensions that are paid to ex-servicemen and their dependants are entirely inadequate. Yet important concessions are being made to the wealthy landowners in both the city and the country. The Government has announced that it will virtually give away £7,000,000 in federal land tax. It has decided upon a 10 per cent, cut in income tax. In the district where I live, the golf club will benefit to the extent of £17,000 from the budget proposals. It is an exclusive golf club and no working man can put a foot inside its doors. The money that is involved in those proposals might easily have been distributed among the men who fought in the last two world wars, and on those who are returning maimed from Koi-ea. Aged and invalid people badly need assistance. The Minister for Social Services (Mr.

Townley) has made the extraordinary statement that allowances to age and invalid pensioners were never intended to be an adequate living allowance. If that is so, how are pensioners to make up the balance that is required for a decent living? Thanks to the generosity of many people who are associated with Christian churches, small allowances are made to assist the pensioners. Many of them who live in the cities and pay £2 a week or more for a room are in a bad way. If it were not for charity, they would be starving. In every State, the hospitals are in need of assistance. This taxing Government has denied to the States sufficient funds to enable them to maintain and extend their hospitals and schools. The Canterbury Memorial Hospital, which is situated in the heart of the industrial’ centre of my electorate, has had to suspend its building programme because of the shortage of funds. Mr. John Higgins, the president of the hospital board, has informed me that foundations for extensions to the nurses’ quarters, a tuberculosis clinic and the out-patients’ department, were excavated some considerable time ago by the New South Wales Public Works Department but that no further progress has been made because insufficient funds are available for the purpose. Shame on this Government for not making suitable provision for the sick, the aged and the invalids of this country!

I refer now to the subject of repatriation hospitals. Recently, a constituent of mine became an in-patient at the Repatriation Hospital at Randwick. After two or three weeks’ treatment he was discharged from the institution, notwithstanding the fact that he was still very ill. When I telephoned the repatriation doctor about his case, the doctor replied, “We had to discharge the man because we have not sufficient beds to cater for all those who urgently need attention Why does not the Government make adequate provision for hospital treatment for those who served their country so nobly in its direst need? A case was also brought to my notice concerning the plight of an ex-serviceman patient who had been admitted to the Yaralla Repatriation Hospital for treatment. Examination of the patient during the treatment period disclosed that he was suffering from cancer that could not be attributed to his war service. He was told that he would have to leave the hospital within a week and obtain operative treatment in a civilian hospital. Is that a proper way in which to treat an old soldier? I made representations to the Minister for Repatriation (Senator Cooper) on his behalf. I assured the Minister that the man would indemnify the authorities against any claim for a pension arising out of the operation but I have not yet had a definite reply. Instances of maltreatment such as this adversely affect recruiting for the armed services. Youths are determined that they will not render themselves liable to maltreatment of the kind meted out by this Government to their fathers, uncles and relatives who volunteered for service in the fighting forces.

Another matter to which I wish to refer concerns the national service training scheme. When the scheme was introduced an assurance was given to prospective trainees that after they had completed their training they would be able to return to their former employment. After a young man in my electorate had completed his training he visited the factory at which he had previously been employed, and in which 70 men had been engaged, only to find that in the’ interval it had been closed down as the result of restrictions imposed by this Government. Ministers have told us that there is little or no unemployment, but they must be aware of the fact that dozens of factories have been closed down and their employees thrown out of work as the result of the policy of this Government. When young men complete their period, of training in the forces and find that the jobs in which they were formerly employed are no longer available, there is nothing left for many of them but to enlist in the Permanent Military Forces. Many do so, as their fathers and relatives did after World War I.

Mr Chambers:

– And after World War II.

Mr MULCAHY:

– That is so. This state of affairs does not assist the Government to give effect to its defence programme.

The pensioners are in a very unhappy plight. . They should not have to depend, as so many of them do, on the generosity of local business people to supplement the. meagre payments made to them by the Government. In these days of high living costs an income of at least £4 a week is necessary to keep a man or a woman from starving. Why does the Government refuse to increase the pension rates to that amount? If war brokeout to-morrow it could provide without difficulty countless millions of pounds f01 war purposes. That .being so, why cannot it make suitable provision for the aged and the sick? Some years ago, when the present Prime Minister was in office prior to the advent of the Curtin Government, he summoned members of all parties to a meeting to consider the suggestion that a national government be formed. The then honorable member for Capricornia, Mr. Forde, asked the Prime Minister what he would do with national credit in the event of an emergency. The Prime Minister replied, “The sky would be the limit “. Why does not the right honorable gentleman regard the sky as the limit now when men are walking the streets fruitlessly looking for work at a time when we continue to bring in thousands of immigrants and retain them in idleness in holding camps, and when great developmental works still await commencement or completion? Behind the right honorable gentleman are seated many young new members of this Parliament who are pressing for amendments of the Commonwealth Bank Act and other legislation ‘because they know that the tide is running against this Government. In Sydney businessmen - most of them ardent supporters of the Liberal party for years - frequently ask me when we are going to get rid of this Government. They are utterly fed up with it. I warn the .back-benchers on the Government side that at the first opportunity the businessmen to whom I have referred, and other intelligent electors throughout the length and breadth of the Commonwealth, will hound this Government out of office. That would be a good thing for Australia. On more than one occasion in the past, the people have called upon the Labour party to clean up messes that have been caused by the maladministration of non-Labour governments. They will do so again at the next general election.

The Prime Minister is merely fiddling with trivialities when he should be dealing with national problems. While the Government talks about recruiting, and is expending hundreds of thousands of pounds for that purpose, two members of the Women’s Royal Auxiliary Army Corps have been detailed to work at the Prime Minister’s residence in Canberra. That is the sort of thing that is happening at a time when thousands of Australian housewives, who are rearing children, are unable to procure domestic assistance. Such a state of affairs is disgraceful. Recently, the Prime Minister wont for a fishing trip with a couple of admirals on an Australian battleship to the Barrier Reef when he should have been attending to the urgent business of the country.

Mr Timson:

-A very poor effort!

Mr MULCAHY:

-Supporters of the Government should be ashamed of such happenings. I repeat that Labour will again be asked to clean up the mess. I have not said anything worse about the Prime Minister than some of his own colleagues have said about him in the past in this chamber and outside. I need only remind, honorable members of the remarks that were made about him by the Minister for Health (Sir Earle Page) and the right honorable member for Bradfield (Mr. Hughes). Everything that they =*a.id about him was correct, and every thing that T have said about him

Mm ie correct. The Government is doing nothing to maintain full emp toymen t and the number of unemployed persons in the community is increasing daily. Already in my electorate thousands of people are out of work or are employed only part-time. Having regard to the rising cost of living, how will those people manage to live? If something is not done to help them, the community will have to provide soup kitchens in order to enable them and their families to subsist. This budget holds out no hope whatever for those persons. Indeed, it is proof that this Government is the worst Administration that Australia, has ever had.

The DEPUTY CHAIRMAN (Mr. Bowden). - Order! The honorable member’s time has expired.

Mr WILSON:
STURT, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1955

. This budget ushers in an era of progress and prosperity for Australia. At present, our economy is fundamentally sound. We have just passed through a period that has been far more critical than the average citizen realizes. Now that we have surmounted that crisis and the weaknesses in our economy has been rectified we. can look forward with confidence to an era of progress. I ask honorable members to cast their minds back twelve months ago. At that time, the community experienced continual black-outs; industry was starved for coal, steel and manpower; and we were passing through the worst period of inflation that this country has ever experienced. Compare that position with the situation that exists to-day. Shortages have been overcome. Industry has been enabled to obtain its requirements of power and coal and our production is reaching record levels. The problem of shortages has now virtually vanished. In order to substantiate that statement, I cannot do better than cite the latest figures with respect to coal production. FirSt. I refer to those that were published only a few days ago. They show that at present there is 500,000 tons of coal at grass on the coal-fields in New South Wales and that private industry is holding 1,000,000 tons of coal in stock. Industry has not been in so favorable a position during the last twenty years. It will be remembered that when the Government was elected in 1949, the boast of members of the Labour party was, “Liberal-Country party governments can’t get coal “.

Mr Curtin:

-. - Who said that?

Mr WILSON:
STURT, SOUTH AUSTRALIA

– The honorable member himself and practically all of his colleagues. During the general election campaign in 1949 members of the Labour party declared,, day after day, “Menzies will not get coal “. To-day, Menzies has got coal, and the principal problem of production has: been solved. During 1949, which was- the last year of office of the Labour Government, monthly production of coal averaged 1,179,000 tons, whereas in 1950, the first year of office of the present Government, production averaged 1,449,000 tons a month. In 1951, the monthly production of coal was increased still further to 1,648,000’ tons, and during the first two months of the current year it totalled 3,400,000 tons compared with 2,200,000 tons for the corresponding months of last year. Those figures are proof of the success of the Government’s policy and provide a complete answer to the Jeremiahs of the Opposition who told the people, “ Menzies will not get coal “, I repeat that the Menzies Government has got coal. The requirements of industry are now being supplied to the. full. Whereas, in the past, steel production fell short of requirements- because that industry could not obtain adequate supplies of coal, or man-power, those shortages have now been rectified. One result of this improvement is that primary producers can now obtain wire netting at a cost of £5 3s. 6d. a 100 yards. That is, at one-third of the price of the imported article, for which they had to pay £15. Now, however, ample supplies of wire netting are becoming available. Figures relating to the production of steel were published in the press a few days ago. The managing director of the Broken Hill Proprietary Company Limited was reported to have stated that during the last twelve months the company had produced 843,712 tons of pig iron, which was the best production that has been achieved since 1942. It produced 822,715 tons of steel ingots, the best production since 1948. Its cold rolling mills produced 24,334 tons of steel plate, which was an all-time record. This remarkable increase of production by the company was attributed to the better supply of labour and coal available. Honorable members will recall that twelve months ago the Prime Minister stated that this country could not progress unless its basic industries got adequate man-power, coal and steel.

I come now to house building. It is most interesting to compare what this Government has done with what the former Labour Administration talked about but failed to do. In the year 1945-46, the first post-war year, when Labour was in office, 15.376 nouses were built in Australia. In 1950-51, this Go- vernment’s first year of office, 67,444 houses were built, or more than four times the number that were constructed in 1945-46. In 1951-52, 75,000 houses were completed, and there are now 80,000 houses under construction. A lot of utter nonsense has been spoken by the Opposition about unemployment. The figures showing the number of persons employed in this country in the provision of housing as at January of this year, and of the four previous years, are as follows :- 1948, 87,942; 1949, 95,266; 1950, 102,249; 1951, 111,606; and 1952, 113,257 persons. The figures I have cited show how utterly foolish it is for honorable members opposite to claim, that there is wholesale unemployment in Australia at present. From 1900 to 1940, a period of 40 years, an average of 80 per 1,000, or 8 per cent, of the workers in this country, were unemployed. In 1939, which was considered to be a prosperous year, 97 per 1,000 of our people, or 9.7 per cent., were unemployed. In January this year the average of unemployment had dropped to only 6 per 1,000, which is much less than in the prosperous year 1939. In 1937 the trade unions applied to the Commonwealth Court of Conciliation and Arbitration for a prosperity loading on to the basic wage because of the buoyant financial condition of the country. Their application was granted, notwithstanding the fact that . 8.7 per cent, of the workers were unemployed. The employment position in Australia to-day is causing every one a certain amount of concern though it is not true that there exists wholesale unemployment in the community, as has been stated by honorable members opposite. The concern about unemployment arises from, the fact that, during the last three months, the rate of unemployment has risen from the all-time low of 6 per 1,000 to 11 per 1,000. There was practically as much unemployment during the whole of the time that the former Labour Goverment was in office as there is to-day. T herefore, if there is wholesale unem ployment at present, there must have been wholesale unemployment during Labour’s regime, because the alltime low of only 6 per 1,000 of unemployed was not attained until last year. The aim of the present Government is to maintain full employment. By its budgetary proposals, combined with measures that are already in operation, the Government is striving to ensure that there shall not be wholesale unemployment in this country. At this time last year, we were faced with the most dangerous inflationary situation that has ever manifested itself in Australia. The inflationary trend commenced during World War II., because our man-power and resources had been diverted to purposes connected with the war. We were forced to draw on stocks for our ordinary domestic requirements, and house building virtually ceased. Following the war there was a terrific demand for consumable goods and houses. During the war the then Government had been able to camouflage the inflationary trend. The people had readily accepted its advice to curtail spending and to divert all available resources to war purposes. Under its war-time powers, Labour instituted drastic man-power, wages and prices controls. As soon as those controls were abolished prices began to increase. During the regime of the Curtin and Chifley Administrations prices increased at the rate of 10 per cent, per annum. When this Government came to office in 1949, the rate of increase of prices fell to 8 per cent, per annum.

At the end of 1950, the Commonwealth Arbitration Court increased the basic wage by £1 a week,, and at the same time the price of wool doubled. Without increased production, hundreds of millions of pounds of new moneys were injected into the economy. The result of that is generally described by the word3 “ Too much money chasing too few goods “. The inflationary situation became highly dangerous. The Government was faced with the alternatives of doing nothing or of taking drastic steps to meet the situation. If the Government had done nothing, obviously inflation would have got entirely out of hand. It is unnecessary for me to give the committee a definition of inflation. I do not think that I can do better than quote the words of a former Labour leader, Mr. J. H. Scullin. He said, “ Inflation will rob the worker of his wages “. Inflation not only robs the worker of his wages but it also robs every person living upon a fixed income and every person with money in a savings bank or invested in treasury bonds. No government, faced with that situation, could stand idly by and let inflation rob the people of their wages and their savings. This Government took the only course that was open to a responsible government, and decided to remove the causes of inflation - too few goods and too much money.

I have referred already to the results of the action that the Government took to increase the supply of goods. There has been a most remarkable and satisfactory increase of the production of coal, steel and houses. A reduction of the volume of money in circulation was absolutely necessary, but, by no flight of the imagination, could the Government have expected that action to effect such a reduction would be popular. No sane person believes that the people like having some of their purchasing power withdrawn from them. Nevertheless, the Government had the courage to do the right thing. It withdrew £300,000,000 of purchasing power from the people and, consequently, was able to avoid borrowing from the public or issuing treasurybills. As a result, the whole of the Commonwealth public works done during the last twelve months have been paid for completely out of revenue. War service homes to the value of £27,000,000 have been paid for by the Government. The ex-servicemen who are occupying those, houses will repay that money to the Commonwealth during the next 40 years, and the people of Australia will not be called upon to pay taxes that would otherwise have had to be imposed upon them. Virtually the whole of the State public works have been paid for by the Commonwealth from one year’s taxation revenue. No other country has ever done such a magnificent job in such a short time as that which has been done by the present Government, not for its own purposes but for the sake of posterity. The Government did not expect to get any good marks from the people last year, but posterity will give it plenty of good marks when it is realized that Australia has an additional £300,000,000 worth of assets, all of which were paid for during the year 1951-52.

As a result of the action taken by the Government to increase production and withdraw purchasing power from the people, all inflationary forces, with one exception, have been removed. No longer is .there too much money chasing too few goods. In the short space of twelve months, there has been a transformation from a condition of acute shortages to a condition when goods are in abundant supply. Now, there is not too much money in circulation. The money that is available has been equated with the supply of goods. The one inflationary force that remains is a form of secondary inflation, peculiar to this country and caused by the decision of the Commonwealth Arbitration Court to tie the basic wage to the cost of living. I shall not discuss -that matter now, because it is before the court. Because the Government has removed the evils that existed in our community twelve months ago, it has been .able to present to the people this yea-r .a budget entirely different from Chat which was presented last year. This is a confidence budget, which will relieve the people of burdens that were placed upon them. I believe that a budget of this kind is fully justified in every respect.

Let me cite figures to prove that my confidence in the future of this country is not based on false premises. There is a simple answer to the silly nonsense that there is not enough money in the hands of the people. At the present time, there is £ 1,079,000;000 in current accounts with the trading banks,- compared with £11’8.0004000 in 1939. That is the people’s money, available at call. They can spend it upon whatever they like. I admit that £1 to-day is not worth as much as £1 in 1939, but, even if it be worth only one-third as much, there is still “three times as much purchasing power in the hands of the people now as there was in 1939, which was a prosperous year. The average weekly bank clearings, which represent the goods that are being turned over each week, total £240,000,000, compared with£42,000,000;in 1939.

Let nae answer another silly statement. T refer to the claim that credit has been restricted by the ‘Government or the banks. The truth is that, so far from being restricted, credit has been expanded very substantially in the last twelve months. In February, 1951, bank advances totalled £495,300,000. By February of this year, the total had reached £654,000,000. In other words, this year the banks are lending about £150,000,000 more than they were ‘lending last year; yet irresponsible members of the Labour party persist in saying that credit has been restricted !

Mr Bryson:

– The Government has admitted that credit has .been restricted.

Mr WILSON:

– The Government has done nothing of the kind. It said that it would divert credit from non-essential industries to essential industries, and that is exactly what has been done. To-day, capital is available for worthwhile undertakings instead of for the luxury industries to which it was advanced when Labour was in office. One would imagine from speeches of honorable members opposite that this country was on the verge of a depression, and that the Australian people were poverty stricken, but let us examine savings bank deposits, which are generally regarded as a reflection of the wealth of the ordinary people. In 1939, savings bank ‘deposits in Australia totalled £245,000,000. This year, the total is £873,000,000, or about four times the prewar figure. Another test of the prosperity of any country is its population figures. A declining population is usually an indication that a country is in a period of decay. Our population is increasing very rapidly. It has risen from 7,000,000 in 1939 to 8,500,000 to-day, and is increasing at the rate of approximately 250.000 a year. During the last twelve months, our defences have been made much more satisfactory. No longer can it be said that Australia is defenceless, as it was when Labour was in office.

The DEPUTY CHAIRMAN.- Order ! The honorable member’s time has expired.

Mr MORGAN:
Reid

.- When this Government was elected nearly three years ago at a time of unprecedented prosperity, it had an opportunity to carry this country upward to even greater heights than it had reached under the Labour administration during the war and in the post-war years; but the Government has failed lamentably to achieve that objective. We have just heard a frank admission by the honorable member for Sturt (Mr. Wilson) that a period of prosperity has been turned into a period of near depression by the Government’s policy of restricting credit, or, as the honorable member put it, withdrawing purchasing power from the community as was done under the horror budget introduced by the Treasurer (Sir Arthur Fadden) last year. The Government has made its run too late to repair the damage caused by the horror budget, and nothing can save it from the wrath of the people. Instead of continuing its bluff, the Government should abdicate and enable confidence to be restored to the people by another Labour Administration. This is the second occasion in a little more than a decade on which an anti-Labour government, under the leadership of the present Prime Minister (Mr. Menzies) and the present Treasurer, has failed the people in a time of crisis. Surely those right honorable gentlemen do not expect a third chance.

The Treasurer’s budget speech was certainly more plausible than his other recent utterances, and those of some of his supporters on theGovernment benches, who described their opponents as a selfish lot of whingeing critics.

The president of the Liberal party of New South Wales has said that Labour’s success at recent by-elections in that State has been due to the ignorance of the electors and their failure to distinguish between State and Federal political issues. Apparently members of the Liberal party have been reading a variation of a well-known book which could appropriately have been entitled “ How to lose friends and not influence voters “. No wonder the party funds of the Liberal party have vanished entirely. That they have done so has been disclosed in a circular issued recently by the chairman of the Liberal party of New South Wales, Mr. L. H. Moore and the chairman of the party’s finance committee, Mr. B. F. Dargan.

The DEPUTY CHAIRMAN. - Order ! I cannot see what the finances of the Liberal party have to do with the budget.

Mr MORGAN:

– I submit that the Liberal party’s finances are directly related to the present financial situation.

Apparently the Government’s disemployment policy has extended to the Liberal party itself. The circular, which was issued from the head-quarters of the party, read as follows : -

Dear Sir,

The funds of the Liberal party will be exhausted at the end of this month.

Unless relief is forthcoming we shall be forced to turn our organization into a povertystricken, ineffective instrument and to break faith with many members of the party’s staff wan came to us in thebelief that they could make a career out of their service to the Liberal cause.

We feel sure that you will agree that the collapse of our organization would be a. national calamity and we believe that you will not hesitate to come to our aid now that we have acquainted you with the seriousness of our position.

We are asking all our supporters to accept March as the commencement of a new “ contribution year “, regardless of when the last donation was made.

Apparently for members of the Liberal party it is a matter of “ Pay-bef ore-you go, and accept the promises of the party executive “. The circular concludes -

The advantage of this arrangement is that we shall know where we stand financially from year to year, instead of from month to month, as at present.

Apologists for the Government claim that, in this budget, there is something for every one, but in reality there is not much in it for anybody except the Government’s wealthy supporters, including, of course, large land-owners who are being freed from federal land tax. Unlike pension increases which are postdated, land tax remissions have been made retrospective to the 1st July. The Government’s volte-face in this connexion calls for the closest scrutiny. Surely the committee is entitled to some explanation of the Treasurer’s somersault. It seems that the right honorable gentleman will have to be a master of all the circus tricks before he is through. Only a few months ago, the Government forced through this Parliament an amending land tax measure under which all estates valued at more than £8,500 were made subject to Commonwealth land tax. Now the Government is forgoing entirely land tax revenue amounting to £6,500,000 a year. Retention of that revenue would have enabled the Government to increase all pensions by at least 5s. or 6s. a week. or, alternatively, to settle at least 600 exservicemen on the land each year at an average cost of £10,000. Yet the Treasurer naively admits that land tax was introduced in 1910, incidentally by the Fisher Labour Administration, for the avowed purpose of breaking up large rural estates which- were not being used to their full productive capacity. Australia is in dire need of increased food production, and many exservicemen are clamouring for land. Immigrants are unemployed in their camps, or are walking the streets in search of work. But the Government is to vacate the field of land tax despite the fact that the States are urgently in need of additional money for the settlement of ex-servicemen. The Minister for Lands in New South Wales, Mr. Hawkins, in an address to the annual soldier settlers conference at North Sydney a few days ago, was reported as having said that only £2,000,000 was available this year compared with. £6,000,000 last year for the land settlement of ex-servicemen in that State. Mr. Hawkins continued -

This means a complete halt in the flow of land for new farmers. It is a tragedy for Australia because every new farm settled means a new gain towards bringing Australia’s food production to the level it must reach if we are to achieve a stable economy.

Such a condition of affairs makes me wonder whether the extraordinary conduct of the Government in this matter is related in some way to its depleted party funds. Perhaps the Government is looking to wealthy land-owners to come to its assistance with financial support during the next general election campaign. Those land-owners will be a rather stingy lot if they do not give some little reward to the Government for the service that it has rendered to them by the abolition of the land tax. The financial support of the land-owners will ensure that the organizers of the Liberal party and the Australian Country party will be retained, and that misleading propaganda will be issued during the next general election campaign in an endeavour to hoodwink the people, as was done during the last election campaign. I doubt whether the people will again be gulled by misleading propaganda.

The Prime Minister will go down in history as the prince of promisers. One of the outstanding promises that he made during the last general election campaign was that his Government, if it were returned to office, would reduce taxes. An analysis of the relevant statistics reveals that the total revenue from taxation under the last budget presented to the Parliament by the Chifley Government was £504,000,000. The present Prime Minister promised that his Government would reduce taxation, yet receipts from taxes and imports of all kind3 amounted to £919,000,000 last year, and the estimate for this year is £863,000,000. That is concrete evidence of how this Government has completely broken its promises to the people to reduce taxation. Had I more time, I could show how the Government has broken many of the other promises that it made to the people during the last general election campaign.

Can there be any wonder, in view of the circumstances that I have described, that the Government ship is about to founder? Last year, when the attention of the world was focused on the plight of Flying Enterprise, the Minister for the Interior (Mr. Kent Hughes) likened the Prime Minister to the captain of that vessel, “ Stay Put “ Carlson. The Minister said that the ship of State had an 80 “per cent, list, but that Captain “ Stay Put “ Menzies was holding on. It now appears that Captain “ Stay Put “ Menzios and his chief mate, the Treasurer, are about ready to jump from the ship and seek a safe haven in calm waters. The bald fact is that the Government, since it has been stripped by the High Court of Australia of its alibi on the Communist issue and called upon to prove its capacity, has shown its ineptitude and complete inability to administer the affairs of Australia.

The Government assumed office in a period of unprecedented prosperity. The coffers of the Treasury were overflowing, and the National Welfare Fund had a credit of £130,000,000, which had been established by the Chifley Government. Our overseas credits rose to a total of £S00,000,000. It is axiomatic that, in a good season or on receipt of a windfall, one should pay one’s debts, and establish reserves for the future. The Government had a great opportunity to liquidate Australia’s overseas debts when .our overseas credits exceeded £SOO,000,000 and our overseas indebtedness was less than £400,000,000. Other members of the British Commonwealth had done so. Even during World War II., South Africa and Canada completely rectified their trade balances with the United Kingdom, and India, which had a debit of £1,100,000,000 before the outbreak of hostilities, was able to convert that adverse balance into a credit of £1,100,000,000 by the end of the war. However, the Menzies Government allowed Australia’s credit to be dissipated in an orgy of imports.

It was to the credit of the Chifley Labour Government that we did not exploit our kith and kin overseas during World War II. However, in peace-time, we should exercise the same business sense and acumen as the traders of the Mother Country have always exercised towards Australia. Had the Government grasped that opportunity, the economic affairs of Australia might have been placed upon a sound basis. Unfortunately, the Government allowed the country to be flooded with imported high priced luxury goods and much useless junk. Ultimately, the Government was forced to place a complete ban on imports, and that action threw the whole economic structure out of gear. Such a situation could have been avoided had the Government adopted a system of priorities for the admission of essential goods that were required for our industries and for the increase of food production. The Government could also have reduced our overseas indebtedness when Australian bonds were under par on the London market. The Treasurer then had an opportunity to repatriate our overseas loans, or to purchase Australian bonds on the London market under par. The Government awakened too late. Only a relatively small number of bonds was purchased. The Government, when it had missed that opportunity, launched out in its extremity on a policy that had been instituted by the “ Tragic Treasurer “ during the regime of the Bruce-Page Government when Australia was placed in pawn to overseas bond-holders. It now seems that the London market has dried up as a source for borrowing, and that we are to be shackled to the almighty dollar. The Prime Minister and other Ministers, instead of hurrying and scurrying to distant parts of the world, could employ themselves here to better advantage by concentrating on measures to place this country on a proper basis and make it independent of overseas financiers. It is easy to run up such debts, but it must be remembered that we will be paying them off for a long time to come. The interest on the national debt, which has now risen to more than £3,000,000,000, is about £90,000,000 per annum or almost as much as the total expenditure for all purposes when the first war-time budget of approximately £100,000,000, was introduced in 1940. It is high time that the Government took stock of the situation and overhauled our financial affairs, both internally and externally. The everincreasing interest bill is a burden on the people and is stultifying the productive efforts of the community.

The policy of raising public loans for governmental and semigovernmental works also should be reviewed. The Treasurer has admitted that national credit, in the form of treasury-bills, will be utilized to finance future State works. If such a form of finance can be used for State developmental works, surely it can be used with greater justification to finance Commonwealth developmental works. After all, the Commonwealth is in an even stronger financial position than are the States, because the Commonwealth exercises overall control of the financial resources of the country. If a factory owner wishes to extend his factory, a farmer to erect new farm buildings, or a worker to build a home, he does not do so from, current income; he raises a loan and pledges his future to repay the capital so raised. Surely the same principle can be applied to national construction, particularly in relation to such important developmental works as the Snowy Mountains hydro-electric scheme, which is of paramount importance to Australia. Surely that scheme could be financed by national credit and the resources of the Commonwealth Bank, without recourse to current revenue. Work on the project could be speeded, up considerably if such a policy were adopted. We have been able to raise millions, and even billions, of pounds for war purposes. Why cannot we also raise money for peaceful purposes? I do not think that the people will ever again believe that when man-power and materials are .available money is not available.

It seems that the Government desires, to ignore common sense methods of financing Commonwealth works. One is led to the conclusion that the Government wishes to keep open to bondholdei’3 and private financial institutions a pool’ for investment. That is readily understandable in the light of Other aspects of Government policy, particularly in relation to the recent extensive decline in the special accounts of the private banks with the Commonwealth Bank. In a few months those accounts have fallen from almost £800,000,000 to less than £200,000,000. Admittedly, the drain on those funds has been for the purpose of financing importers who considerably over-bought and caused the recent glut of imported goods in this country. In the course of time, the money which has been advanced to importers and retailers will flow back into the coffers of the banks, because the stocks that are in the hands of the wholesalers and retailers will be sold. Overdrafts will be wiped off. Hundreds of millions of pounds of these special deposits will become available for investments, and unless the Government is very careful, there will be another “boom and bust” period, such as we experienced after World War I. Government bonds will no doubt become the logical form of investment for such money.

The Government seems to have been misled by propaganda, launched during the last year or so, to the effect that interest rates on bonds and on overdrafts for home purchase and similar purposes should be increased. If the special deposits to which I have referred are allowed to be utilized for investment in government bonds, instead of being applied to constructive purposes, the national debt will be still further swollen, the interest bill will be increased, and inflation will be accelerated. It is interesting to note that one of the leading lights in the dissemination of such propaganda was Sir Douglas Copland, who is Vice-Chancellor of the Australian National University. It makes one wonder for whom Sir Douglas holds his brief : The people or the bondholders. Certainly it is the people, or the taxpayers, who provide his salary. Should we have another slump, no doubt he will come along with a plan and again tell us that contracts are sacrosanct, and that interest rates on bonds must be maintained. Perhaps the successor to Sir Otto Niemeyer - Mi”. Eugene Black - or other representatives of the International Bank for Reconstruction and Development, will come here and tell us that we must pull in our belt? and at the same time keep up the payments on our overseas commitments.

The Government and financial institutions could and should play a greater part in relation to home building finance. Admittedly, some financial institutions have in the past operated in that field,, but others have done very little. At the present time, the Commonwealth Bank is holding the fort. It is practically the only institution which is making any real provision for home building finance. E ven that bank could do more than it is doing now to try to stem unemployment. The building trade is the barometer of our prosperity,, or otherwise. More than 100 allied trades are associated with the building industry. It has been estimated that some 600 people are interested, either directly or indirectly, in the construction of each home. That, is to say,, from the time the bricks are made or the timber milled, until the time when the title deeds are given to the home owner, 600 persons have- been interested in its construction. Therefore; by curtailing credit for homebuilding purposes the Government may be initiating a train of events that it may not be able to stop..

A recent gallup poll showed- that some- 80 per cent, of the people who were approached indicated that they were affected, in- some way or another,, by the credit restriction policy of the Government. The forces- set in motion by that, policy have got out of hand, with the result that the growing army of unemployed could precipitate a major depression in this country. The depression of 1929 was man-made. To a great, degree. it was started by the “ bears “ of “Wallstreet. Deliberate tampering with, the economic structure could also result in a man-made depression, especially if done by a government. In the past, although the blame for an economic depression could be placed on the “ bears “ of Wallstreet, the banks, or some other section of the community, at least the people could look to the government for rectification of the, situation. But when it is found that the government itself is deliberately creating a depression, to whom can the people then turn? Such action on the part of the government completely undermines the confidence of the community. The Government may think that it can turn deflation on and off like a tap, but it is not as simple as that. For instance, in the building trade, continuity of operation is most important, both for the building trade itself and for the allied trades which depend on it. The building trade cannot thrive unless builders are able to keep their teams together. Because building operations have slowed down, many building teams have begun to disperse; the men will go into other industries, and may never return to the building trade. That was the experience in the United States of America about two years ago, when a policy similar to that which this Government is now applying was put into operation. There was immediate unemployment in the trade, and now building contractors in the United States of America are experiencing great difficulty in getting teams together again.

As for the State housing programmes, I maintain that there was never any need to raise public loans for this purpose. A special department of the Commonwealth Bank should advance money to the housing commissions, and the money would be returned to the bank as the homes were completed and occupied. Under the present system the State Housing Commission must pay the advances back to the Commonwealth as soon as homes are sold to the tenants, and then they must go hat in hand to the Commonwealth for more loan money with which to continue their operations.

We have also to consider the social aspect of home building, an aspect which prompted Mr. Justice Toose to say that the housing shortage was one of the most important contributing factors to the break-up of family life. His Honour was reported as follows in the Sydney Daily Mirror of the 5th August of this year : -

page 325

QUESTION

JUDGE ATTACKS HOME SHORTAGE

Mr. Justice Toose, in the Divorce Court, said to-day, “ The biggest trouble these days is to get a home. The housing shortage is the biggest cause of divorce and separations “. “ I think flats are one of the biggest menaces to family life that have come into existence in recent times,” he said. “ A lot of people can’t even get a flat, however, and when young people go into one there is usually a prohibition that they must not have children.”

In the case before the court as in many others, the poor old motherinlaw got the blame, although she was only doing her best to provide the young couple with a roof over their heads. However, such arrangements do not usually work well. Young married couples should have a home of their own where they can share the joys and responsibilities of married life. We hear a good deal about the duty of young men to join the armed services, and I believe that the best way to foster in their minds a sense of responsibility would be to provide them with a stake in the country in the form of a home for which they would be prepared to fight.

The DEPUTY CHAIRMAN. - Order ! The honorable member’s time has expired.

Mr LESLIE:
Moore

.- Last year’s budget was described as a politically courageous effort, and subsequent events have indicated that the courage of the Treasurer (Sir Arthur Fadden), and the confidence that he exhibited in the people of Australia, were fully justified. The present budget is a further indication of the courage of the Government and the Treasurer. The Government has placed itself in the hands of the people, recognizing that they, when informed of the facts, will accept the responsibilities which face them. It is a truism that the destiny of a nation is in the hands of its people, and of nobody else. It is, however, the task of the elected or appointed leaders of the people to guide them by advice and suggestion so that they may be assured of a happy destiny. That is the task of members of this Parliament. If the speeches of members of the Opposition on the budget are an indication of the manner in which they would lead the people, and of their confidence and faith in the courage and integrity of the people, it is perhaps well for the country that they are not in government to-day. [Quorum formed.”] The tribute that has been paid to me by the honorable member for Hunter (Mr. James) by ensuring that more honorable members from his side of the chamber should be present to hear my speech leaves my modesty no greater than it was previously. However, I am gratified to learn that he was impressed by what I said, and I hope that the few other honorable members of the Opposition who have entered the chamber since the bells commenced to ring will be impressed also when I repeat that the people have a right to expect guidance and advice from their elected leaders in this chamber.

In this budget the Government has shown its willingness without the coercion that honorable members opposite would use to offer advice and suggestions, about ways in which our economy can be placed on a firm foundation. The Government has taken its courage in both hands and has displayed its willingness to face up to the responsibility placedupon it. In this budget debate I have been obliged to listen, so far, mainly to party wrangling by members on both sides of the chamber. I believe that members indulge in altogether too much party wrangling. If some of the time and energy consumed in this chamber in party political wrangling, during this critical stage of our history, were used in co-operative endeavours by honorable members to solve our economic problems, we would justify the expenditure of £718,000 to maintain the Parliament in the forthcoming twelve months. If honorable members opposite, and those on this side, continue to indulge in party political wrangling, they will be rightly subjected to severe censure by the people.

M/. Clyde Cameron. - The honorable member himself is indulging in party political wrangling.

Mr LESLIE:

– I hope that the honorable member for Hindmarsh (Mr. Clyde

Cameron) will occasionally allow his thoughts to rise above the small circle within which they are habitually confined. There has been a lot of talk about unemployment and full employment. Most of it has not been sincere. Unemployment is always a danger, but nothing has been said in this chamber about people in full employment whose pockets were bursting with money but who could not buy with it the goods they needed. That was the position when this Government assumed office. Indeed, there was a rationing of goods that were scarce. This Government has altered that state of affairs, and now there is a distribution of plenty. As long as the talk of unemployment continues without constructive action being taken, production will not increase. I suggest that all this talk of unemployment^ is mere party political stunting. Every one, including myself, is afraid of unemployment, but as long as there is employment, full or part, in avenues that contribute no real substance to the national wealth, this country will be in serious danger of severe unemployment. Much was said recently about empty factories. Honorable members opposite should remember that before a man can be employed to make a shirt somebody must grow the cotton for that garment.

Mr Ward:

– The honorable member is right on that point.

Mr LESLIE:

– Of course I am right, and it is a pity that the honorable member for East Sydney (Mr. (Ward) is not also right in many of the points that he tries to make.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The honorable member for Moore (Mr. Leslie) should stop his party political wrangling.

Mr LESLIE:

– The honorable member for Hindmarsh should keep his tongue behind his teeth if he wants me to remain out of arguments. Much has been said about pensions.

Honorable Members. - Hear, hear!

Mr LESLIE:

– I hear “ Hear, hears ! “ from all over the chamber. That indicates that we are all willing to help the pensioners.

Mr James:

– We want to give the pensioners more money. 1

Mr LESLIE:

– I also want to do that, but instead of merely saying so I, together with my colleagues, have attempted to devise ways by which the pensioners can be given more money. The only way that they can get more is by the production of more goods. _ We cannot get money for pensions by throwing our hands in the air and trying to grasp it out of nothing; we must collect it from people who produce goods and food. I take second place to no man in my sincerity about increasing social services. If honorable members opposite are sincere they should do something about it by attempting to encourage the producers to greater efforts, because they are the people who really pay the pensions. It is easy to say, “We want this, that and the other “. We should do something. Every Sunday there are dozens of people who, on the Yarra Bank, Melbourne, in the Sydney Domain, on the Esplanade in Perth and in Botanic Park, Adelaide, shout about various injustices. They are people without responsibility. The elected leaders of the people in this chamber have responsibility and should not try to follow the example of the Sunday orators.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The honorable member should leave party politics out of his speech.

Mr LESLIE:

– I am leaving them out as far as possible. Honorable members opposite should try to present practical ideas to the committee about how extra rooney should be obtained. I do not mean that they should talk about fiduciary money; they should talk about the ways in which we can get real substantial money. I suggest that the only people who can supply that money are the primary producers.

Mr Ward:

– What about the land tax?

Mr LESLIE:

– My friend mentions the land tax. I believe that the pensioners will receive a little more butter and cheese because of the repeal of the land tax laws. Surely honorable members opposite realize that by indirect encouragement of primary producers direct benefits will accrue, not only to pensioners, but also to the people in general. The Opposition should co operate with the Government. Honorable members opposite should join us in our attempts to encourage production of the commodities needed by the community, because if they do that it will be in the interests of the pensioners, the unemployed and everybody else. By means of co-operative effort, the people of Australia can progress until the nation becomes a mighty force in the world because of its prosperity and production. We shall not progress while constructive proposals submitted to this Parliament are subjected to criticism merely for party political purposes.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– The honorable member should try to sink his differences with the honorable member for East Sydney.

Mr LESLIE:

– The suggestion is so fantastic that it leaves me speechless.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– But the honorable member said that party politics should be set aside.

Mr LESLIE:

– That suggestion goes beyond the bounds of party politics.

The Government has set out to stimulate primary production. Honorable members opposite may sneer as much as they like about the so-called “ hill-billies “ in the corner of the chamber where members of the Australian Country party sit, but I remind them again that, before one of the workers whom they claim to represent can make a shirt, there must be a “hill-billy” to grow the cotton. The workers still ride on the backs of the woolgrowers. Healthy primary industries are vital to the basic economic soundness of the country, and their health depends upon the availability of machinery, materials and labour. Surely nobody will deny that this Government has made tremendous strides towards meeting the needs of the primary industries. Fair prices, and consequent reasonable profits, are essential to the welfare of the primary producers. This Government has set out to remove, as circumstances permit, the limitations imposed by the former Labour Administration that have prevented farmers from obtaining just prices for their products. We must ensure that primary producers shall be able to retain for their own use an adequate share of the proceeds of their labours. I do not suggest for a moment that this result should be achieved by means of the payment of subsidies and the granting of concessions. That method of helping the producers is always expensive in the long run. The farmers usually find that they are expected to provide reciprocal concessions. However, they can be encouraged by means of tax adjustments. I ask honorable members opposite, when they consider this subject, to keep in mind the fact that primary producers do not enjoy a 40-hour week or the amenities that are available to workers in secondary industries. They are compelled to face the hazards of bad seasons and other adverse conditions that do not apply directly to any other section of the community. Therefore, they are entitled to retain a share of the wealth that they produce that will be sufficient to compensate them for the disadvantages of their occupation.

This Government has gone a long way towards alleviating their hardships by providing for the amendment of the income tax law so as to encourage investment in primary production. I refer to the new provision for a 20 per cent, depreciation allowance on certain capital equipment purchased by primary producers. The granting of that concession, under which depreciation will be allowed over a period of five years at the rate of 20 per cent, per annum, will give a tremendous stimulus to investment in primary production. The provisional tax adjustments for which the Government has provided also are an incentive to such investment. The budget provision for the payment of increased living allowances under the war service land settlement scheme and other re-establishment programmes has my support. The education allowance to taxpayers also will be of particular benefit to residents of rural areas. The sales tax reductions for which the Government has budgeted will afford relief to primary producers. An examination of the adjustments that have been made in the Government’s financial policy in recent months reveals a clear design to strengthen our primary industries, upon which the national economy rests. When those industries expand and flourish, our problems in relation to employment and social services can be adjusted with ease, because our economy will be healthy.

Once more I express my objection to the long-established practice of submitting budgets to the Parliament holus-bolus and without sufficient detailed information to enable honorable members to debate them thoroughly. The Treasurer customarily makes a general statement, and honorable members are expected to approve of the budget without having the opportunity to consider it closely from every standpoint. I hope that I shall obtain support from honorable members generally on this issue so that the practice will be discontinued. The budget papers for 1952-53 lump a huge sum under the general classifications of incidentals. That is not right. I suggest that every Minister should introduce his departmental budget, even if it takes weeks to do it. Honorable members are paid to attend to these matters and surely we should accept the responsibility of carefully investigating the expenditure of such a huge sum of money as £959,000,000.

Mr CURTIN:

– Hear, hear!

Mr LESLIE:

– I hope that the honorable member for Watson (Mr. Curtin) is as sincere in his interjection as I am and that he would be prepared to say to his own leaders what I am saying to mine.

In this budget it is proposed to spend £100,000,000 out of revenue on capital works and services. I contend that it is not right that revenue should be used for expenditure on productive capital works. Out of the sum of £100,000,000, £31,000,000 has been allocated to business undertakings. I suggest to the Treasurer that that £31,000,000 should not be taken from revenue. Twentyeight million pounds have been allocated to the Postmaster-General’s Department. It is proposed to spend the other £3,000,000 on Commonwealth railways and territories. That amount is not so important. Of the sum of £28,000,000 which I have mentioned, £4,000,000 comes under a general heading covering buildings, works, fittings, furniture and the acquisition of sites. I ask honorable members to imagine their reaction if any one were to ask their permission to have a petty cash account of £4,000,000. We arc entitled to know how and where this money is to be spent. The proposed expenditure is £15,000,000 on the Snowy River scheme, £28,000,000 on war service homes and another £18,000,000 on incidentals. This latter sum may be called a petty cash account for capital works. What use is to be made of it? Is part of it to be used for the erection of repatriation building in Western Australia? where can the details of this expenditure be found ? All honorable members should be interested in them ; otherwise they have no right to be here.

The DEPUTY CHAIRMAN.- Order ! The honorable member’s time has expired.

Mr MULLENS:
Gellibrand

.- It appeared to me that the proceedings in this chamber last night were a veritable feast of Belshazzar. They were a prelude to the death throes of this Government which- has had such a deadly and devastating effect on the Australian economy. The moving finger having writ, and the signs of the inevitable having appeared on the horizon, it is very interesting to observe the reactions of those who are about to die and who saluted the Parliament when this budget was presented. The Prime Minister (Mr. Menzies) - the leader, the conquering hero for whom no task is too great - expounded his panacea for the diseases of this community with the glint of battle in his eye while his cohorts behind sat goggle-eyed and open-mouthed. His Cabinet colleagues, as is their wont, sat satisfied, smug and serene. They considered that the job was done and the victory theirs. The poor, benighted cohorts felt temporarily relieved from the tension and strain that comes from the spectre of an imminent election. They are whistling to keep their courage up in the grave yard of the Australian economy. Unemployment does not mean a thing to them. It is a ghost to be dissipated in the morning air. It is a spectre ; it does not exist. The Prime Minister can rite figures and percentages ad lib. and persuade his supporters that, unemployment is nonexistent.

Mr Francis:

– That is utter nonsense.

Mr MULLENS:

– It is absolutely correct. That was the effect of the utter ances of the Prime Minister. He implied that unemployment was a chimera - a spectre of the imagination conjured up by a malicious Opposition with a view to creating a depression psychology.

I now ask honorable members to turn their faces from that little feast of Babylon. There are some other faces in this community - Henry Lawson’s faces - the faces of the men in the street. Is not the ordinary good Australian entitled to be bewildered and stunned by the avalanche of verbiage which occurred last night? Of what comfort is it to him that the Prime Minister has quoted incentives, counter inflationary measures and trade balances ? They mean nothing to the ordinary man. Let us get down to earth and examine this budget from the point of view of the man and woman in the street. If there is one extreme disability attached to Canberra, it is that our isolation from the rest of the community tends to give us an unreal view of the national situation. The stage was. set last night with the glamour in which the Prime Minister rejoices. Every one hung tensely on his words. But what is that to the man in the street ? Nothing. We must get back to fundamentals and realities and to the problems of the a verage man which are irrevocably bound up with this budget. One of these problems is the rising price of food. Food prices loom largely in the forefront of the problems of the ordinary man and woman. The point is elementary, my dear Watson ! If the people have to find extra money to pay for food and the other necessities of life, they will have less to spend on the products of light industry. Unemployment must follow. Statistics show that during the three months ended May, 1952, the amount of money that was spent in Australia on food and groceries was 23 per cent, more than in the last quarter of 1951. That means that the ordinary person had to spend 23 per cent, more money from his wages than he did in 1951. Sales of meat rose by 27 per cent, and of other foods by 18 per cent, but sales of clothing, drapery and footwear fell by 2.5 per cent. In that quarter, retail business in Australiatotalled £467,000,000 - a decline of £54,000,000 on the previous December quarter. Surely the farming community must realize that if a larger proportion of the family income has to be spent on food, there must be less money available for furniture, electrical equipment, hosiery and the products of other light industries. That starts a train of unemployment, and it snowballs. I agree with only one statement that was made last night by the Prime Minister. He said that it was possible to price an article out of existence. It is possible to price a section of the population out of employment, too. Increased prices for food, clothing and other necessities tend to place out of employment workers in light and unessential industries. By implication, the Prime Minister said that the figures to which I have referred do not matter very much. He said that unemployment was almost entirely non-existent, like Banquo’s ghost at the feast. I have the right honorable gentleman’s exact words on one point. He said -

This year ours is a balanced task. Last year our task was to attack the problem of inflation. We are watching it carefully. Ours is an attitude of constant watchfulness and ready flexibility.

Those words will butter no parsnips. They will not place an extra pound of butter on the kitchen table. Constant watchfulness is poor comfort for the new Australians who are standing outside factories like mendicants seeking employment. It will not assuage the misery of the Italians at Bonegilla who are strange people in a strange land and without employment. Words will accomplish nothing. The Government needs contact with reality. I agree on one point with the honorable member for Leslie (Mr. Moore), when he said that the fundamental cure for the problem is greater production of raw materials and primary products. Seventy per cent, of the imports entering Australia are raw materials or capital equipment to be used by Australian manufacturers. Eighty per cent, of our exports are primary products. Obviously the fundamental weakness which is causing an adverse balance of trade and unemployment is the inadequate use to which land is being put.

Australia has not enough farmers. Study the Australian landscape. Honorable members will See mile after mile of the best country devoted to the cawing of crows and the deification of strutting merinos. That is the great Australian loneliness which is represented by the new millionaire class - the squatters.. Honorable members in the opposite corner of the chamber cannot deny with truth that extensive areas of virgin soil have never felt the touch of the plough, and are devoted only to wool production. I refer them in particular to the western district of Victoria, which has adequate rainfall and large areas of black and chocolate soils. We hold the land as a trusteeship. If we do not fulfil the terms of that trust, the day may come when we will be annihilated by the hordes that will press down upon us from the north. They are so obsessed by possessions, pride of profit, ownership of land and the aggregation of broad acres, and all that goes with those things - social standing and prestige, the Royal Agricultural Show, the lawns at Flemington, and parties at South Yarra - that in their selfishness, their rotten, sordid materialism, they are as bad in their social and ethical attitudes as revolutionary communism ever was.

Mr Failes:

– The honorable member is speaking about the farmers?

Mr MULLENS:

– I am glad of that interjection. I love the farmers - the small farmers, the men who do the job, the Mallee farmers I know so well, the men on small holdings, the real producers and the workers; but I have no time whatever for the artificially gilded species whose sole interest is the merino and the sale of its product - those who make no worthy contribution to our life. The small farmer has done a good job. Before the war the great majority of farmers earned very small incomes. Honorable members will observe that I am differentiating between farmers and squatters. Victorian data indicate that farm incomes in Australia before the war were spread roughly as follows : -

The whole burden of my story in regard to farming is that we need more and more real farmers. We want the land to be unblocked. The problems of this country can be epitomized in the three words “ produce or perish “.

Mr KeUt Hughes:

– Agreed !

Mr MULLENS:

– Deep down in my heart of hearts I know that the Minister’s interpretation of the phrase “Produce or perish “ is confined to the trade unions, whereas mine encompasses those persons who waste God’s acres, who’ produce nothing and who live on the proceeds of their selfish acquisitions. I was astounded and bewildered that the Government should have the audacity and the temerity to abolish completely the land tax. In the days of my youth increased production was the keystone, the cardinal point, of. the policy of the Fisher Government in 1910 and 1911. That Government said that we must have closer settlement. In the neighbourhood of the Ercildoune estate at Waubra, near Ballarat, estates were subdivided and sold to hundreds of small farmers. Why any sane body of men should decide’ to abrogate the land tax I do not know. That is one of the amazing things that happen in politics. That decision, which came out of the blue, may result in a form of agricultural paralysis, and, as a concomitant of it, large’ property owners in the cities who estimate the value of thpir land at thousands of pounds a foot will be made a present of £10,000,000. Why such a decision should have been made completely passes my comprehension. All the ethical protestations in the world of right finance and conduct pale into insignificance and are meaningless when, at this time of trouble and turmoil, such a decision is announced to the community. If the average farmer needs an incentive, he deserves it. By the term “ average farmer “ I mean the ordinary farmer. If he earns an income of between £1,000 and £11199, the tax on each £1 in excess of £1,000 is at the rate of 5s. lOd. in the £1. A farmer with an income between £1,400 and £1,599 pays tax on every £1 in excess of £1,400 at the rate of 7s. 4d. in the £1. A farmer with an innome in excess of £2,000 but less than £2,399 nays a marginal tax for every £1 in excess of £2,000 at the rate of 9s. 4d. in the £1. The rate increases steeply until ultimately a farmer with an income of between £5,000 and £5,999 pay3 14s. 8d. on every £1 of income in excess of £5,000. No one objects to the granting of incentives to the small farmer who has to overcome the difficulties of climatic conditions, extra work, shortage of labour, costly machinery and hard-plodding toil. He is entitled to all possible assistance; but my supreme and lasting objection is to the granting of concessions to the well consolidated and well entrenched butterflies in the grazing community who are already well endowed with the fruits of the earth.

Mr Failes:

– The honorable member has never held a plough in his life.

Mr MULLENS:

– I shall allow that interjection to pass. As every one knows there are private members who sit on the opposite side of the chamber who know full well the sum and substance of my indictment. Not all graziers have the ethical public spirit of my friend the honorable member for Farrer (Mr. Fairbairn), whose holdings near Holbrook are an example of efficient and useful farming. Judging by the interjection of the honorable member for Lawson (Mr. Failes), who sits, smug and complacent, in this chamber, he has entirely no regard for what happens to the rest of the community.

Interwoven with the farming and employment problem is the problem of immigration. It is my considered and sincere opinion that if there has been one outstanding achievement in Australia during my service in this Parliament, it has been the immigration programme that was sponsored by the honorable member for Melbourne (Mr. Calwell) when a Minister in a Labour government and has been continued with efficiency by the present Minister for Immigration (Mr. Holt). The honorable member for Melbourne will, however, agree that the conditions that were obviously responsible for the success of the immigration programme in earlier years no longer exist. To-day, we have not full employment. Substantial unemployment already exists. Therefore, Labour submits that the immigration programme should be revised in the light of existing circumstances. I make the plea to the Prime Minister that we, having brought these immigrants to this country, have at least a moral liability on their behalf, and having facilitated their entry into this country and their absorption in the community must do our best, in the name of common humanity, to ensure that they shall not be sent will-nilly round the country to be employed in chinning grass or doing unproductive tasks of that kind. I am afraid that the crisis is upon us. It will not be solved by selfishness or by the over-development of the acquisitive instinct. It will not be solved by treating human beings merely as tools. Unfortunately, that attitude is characteristic of many Australian graziers. This crisis will be solved by the ordinary people - the farmer, the worker and the man in the street. Their problems are real; they are subject to all kinds of emotions and tensions. To-day, many of them are bewildered and stunned. They stand at the beginning of what might turn out to be a shocking wave of unemployment; and in their innocence and simplicity they appeal to the- pundits in this Parliament to do a job that will be worthy of the nation.

Mr. DRURY (Ryan) f4A7].- For the last half hour the honorable member for Gellibrand (Mr. Mullens) has treated the committee to flights of oratory. One can only regret that his enthusiasm for the man on the land and his professed desire to see our vast unsettled areas developed did not inspire the Labour Government during the eight years that it was in office. The honorable member marred his speech when he opened his remarks by making a personal attack upon the Prime Minister (Mr. Menzies). That approach has been a significant feature of the attitude that all honorable members opposite, who have so far participated in this debate, have adopted. It reminds me of the old but discredited legal maxim to the effect that when one has a bad case one should abuse the opposing attorney. Obviously, the Labour party has a ‘ bad case in this debate. Consequently, honorable members opposite have devoted a great deal of their time to personal attacks upon the head of the Government. Such attacks are reprehensible. Those members of the Opposition who have already spoken have revealed themselves to be arch apostles of gloom and despondency.

This incentive budget, upon which I warmly congratulate the Treasurer (Sir Arthur Fadden), has been widely acclaimed throughout the length and breadth, of the country. Indeed, it has been acclaimed by everybody with the exception of members of the Australian Labour party and the Communists. Obviously, the Labour party is jealous of the solid achievements of this Government. Honorable members opposite unblushingly distort facts in an attempt to cover up their own incompetance and with the object of sowing seeds of doubt and mistrust in the minds of the people. Having regard to developments in the interim, it can be said of the budget that was introduced twelve months ago that the proof of the pudding was in the eating of it. During that period, the economy has been stabilized. The situation that existed in Australia twelve months ago had1 to be corrected by a necessarily unpopular budget, supplemented by necessarily unpopular measures. At that time, inflation was rampant in this country ; wool prices were at an all-time high; and we were witnessing a series of phenomenally high increases of the basic wage. In the intervening period, however, there has been some levelling out and, indeed, some reduction of the quarterly adjustments of the basic wage.

Mr WARD:

– I have not noticed them.

Mr DRURY:
RYAN, QUEENSLAND

– The honorable member for East Sydney (Mr. Ward) must have been asleep. Two months ago, the Treasurer presented to the Parliament a comprehensive and enlightening survey of our economic position. He pointed out that when the previous budget was introduced there were bottlenecks in many key industries, labour was in short supply, the turn-over of labour was high and its productivity was low, far too much was being attempted in many spheres, we had a vast and largely unco-ordinated programme of public works, the demand for consumer goods was greatly in excess of the supply, secondary industries were expanding indiscriminately, housing costs had soared to unhealthy heights, and the pull on our resources was strongly towards less essential industry and away from basic industries and agriculture. In order to meet those unfortunate conditions, strong steps had to be taken. Consequently, the Government introduced a comprehensive programme of counter-inflationary measures that were designed to bring the level of money demand into balance with the supply of goods and services. Features of that policy were that in its 1951 budget the Government budgeted for a surplus of £114,500,000, taxes were increased, public works expenditure was pegged, capital issues control was further tightened and bank advance policy was adjusted. The result is that, to-day, inflation has been halted, to some degree at least. The Government does not claim that inflation has been completely arrested, but it claims, quite justifiably, that it has been slowed down. To-day, industry is more efficient than it was twelve months ago, productivity of various basic commodities has increased, there is less recklessness in the investment market. There is a gradual returning buyer’s market, and labour turnover has been reduced whilst there has been some movement of labour into essential industries.

In recent months, the Government has made special tax concessions to the man on the land. Despite the miserable claim of honorable members opposite that the Government is neglecting its responsibility towards the man on the land, it has, in fact, placed his interests in the forefront of its policy in an endeavour to help him and the economy generally. Capital issues control has been made more flexible. Our limited capital is being channelled into essential production. Much has been said during this debate about the employment situation in this country. I think that the Prime Minister (Mr. Menzies) in his brilliant address last night adequately dealt with the contentions of honorable members opposite, particularly the figures cited by the Leader of the Opposition. Therefore I shall not devote much time to that subject. Suffice it to say that the employment situation has been grossly magnified and distorted by the Opposition. I agree that the trend should be watched closely, and I assure the committee that that will be done by the Government. There still remains plenty of developmental work to be done in this country.

Mr Ward:

– Why does not the Government get on with it ?

Mr DRURY:

– We have been undergoing a period of painful adjustment. I believe to be correct the prediction that the difficulties with which we have been confronted will be of only a temporary nature. Honorable members opposite are proving by their interjections that they arc the apostles of gloom, and that their objective is to sow doubt in the minds of the people.

Commonwealth and State relationships have got into a horrible tangle. We have witnessed the unedifying spectacle of the State Premiers lining up year after year, cap in hand, pouring out tales of woe to the Treasurer. The more doleful the tale, the more chance have they had of obtaining additional money for their States. This Government has been very generous to the States. This year it will again pay to them a record amount. I believe it to be in the best interests of democracy and of our federal system that the uniform system of taxation should be .abolished, and I hope that that will be done early in this financial year. As far as the future relationships between the Commonwealth and the State governments are concerned, I consider that the State Premiers should display a lot more statesmanship than they have displayed in the past. They should adopt a much wider outlook. There has been a strong tendency by Labour Premiers to attempt to cover up their own ineptitude and misrule by blaming the Commonwealth at every opportunity. The Premier of Queensland has just completed a tour of that State. Whenever he was asked why this project or that project had not been completed he replied that the reason was that the Commonwealth had not given to Queensland sufficient money.

Mr Bruce:

– Is not that right?

Mr DRURY:

– It is not right. The nature of the interjections of honorable members opposite discloses their ignorance of the facts. The following statement in a publication that was issued by the National Bank of Australasia Limited in June shows that this Government has achieved a degree of stability of the economy and that there is no need for gloom -

One of the compensating changes has been the better balance of demand which has produced a useful impetus towards increased efficiency, and has slowed down cost increases, a necessary step if progress is to continue.

The following statement also appears in the publication : -

A fair measure of success can be claimed for the economic policies which, in recent times, have sought to maintain prosperity with a balance of progress . . . Indeed, in view of the magnitude of recent changes . . and of the difficulties of co-ordinating policy amongst seven Governments, each by no means free from sectional pressure, the wonder is that prosperity has been so well retained and progress so little retarded . . .

I remind honorable members opposite that this Government during its two and a half years in office, has maintained a record of solid progress and achievement, and that it has honoured the majority of the promises that it made to the people during the general election campaign in 1949.

Mr WARD:

– Will the honorable member enumerate the Government’s promises that have been honoured?

Mr DRURY:

– Within a few weeks of assuming office this Government abolished the rationing of petrol, tea and butter. At its earliest opportunity it repealed the former Labour Government’s banking legislation of 1947, which aimed at strangling the private banks of this country. The Government has re-established the Commonwealth Bank Board, and the Treasurer has stated that further legislation will be introduced to safeguard the interests of the private trading banks. In the teeth of obstruction by the Opposition, the Government provided endowment for the first or only child in every family under the age of sixteen years. The arbitration system has been greatly strengthened and streamlined in many important respects. Social services benefits have been expanded, and pensions, repatriation benefits, and payments, to sufferers from tuberculosis have been increased. A successful national health scheme has been inaugurated, and the Government has a very worthy record in relation to housing and immigration. It is true that immigration is to be restricted. It is only right that our immigration programme should be administered realistically, having regard to current circumstances and requirements.

The important subject of defence is constantly derided by the honorable member for East Sydney and his friends.

Mr WARD:

– Rubbish !

Mr DRURY:

– In the past the honorable member for East Sydney has derided the Government’s defence programme, and he has advocated in the post-war years the inauguration in Australia of a Soviet system. This Government introduced a national service training scheme, which is progressing satisfactorily. A battalion of our forces is proudly serving the cause of the United Nations in Korea, and a fighter wing of the Royal Australian Air Force is proudly bearing Australia’s flag in the Middle East. Largely as a result of the Prime Minister’s recent trip abroad, we have achieved rationalization of our defence organization and we now know better where we stand in relation to the overall programme of the British Commonwealth of Nations. We shall be able to obtain British tanks and United States aircraft. Some honorable members opposite have no conception of the international situation and of the need for a big defence effort in this country.

We promised that we would simplify the taxation laws, and we have done so. We have also reduced taxation. Last year we could have reduced taxation by probaly £.150,000,000 or £160,000,000 if it had not been for the fact that we took the unprecedented step of backing the States works programmes. To a great extent we have carried out our desocialization promises. We have placed Australian National Airways Proprietary Limited and Trans-Australia Airlines on a fair and competitive basis, and we sold the Commonwealth holding of shares in Amalgamated Wireless (Australasia) Limited.

Mr DRURY:

– I know that honorable members opposite do not like to hear the facts, but the committee should be reminded of this Government’s achievements. We have a good record in the fight against communism. But for the successful efforts of honorable members opposite, this Government would have obtained the additional power that it sought by referendum to deal adequately with the Communist menace. Again in the teeth of obstruction by the Opposition we brought down legislation to provide for the holding of secret ballots by trade unions. That legislation was warmly welcomed by the vast majority of trade unionists in this country because it placed in their own hands a weapon with which to fight the “red” leaders that have dominated them for so many years. A fact that should be emphasized is that the strength of the Communists in this country now is known to be approximately half what it was when this Government assumed, office. The success of our secret ballots legislation and of our efforts on the industrial front generally is shown by the fact that during the last two years there have been no major industrial disturbances in this country. A great portion of our energy is devoted to achieving an increase of production, especially of primary production. We established, as we promised to do, a Ministry of National Development, the main purpose of which is to direct the resources of this country into the best possible channels.

The Prime Minister, in two successful trips abroad, has negotiated two dollar loans with the International Bank for Reconstruction and Development, one of 100,000,000 dollars and another of 50,000,000 dollars. The right honorable gentleman’s trips abroad have been the subject of derision by honorable members opposite, because they do not appreciate the standing and the stature of our Prime Minister in world affairs. He was instrumental in arranging for a Commonwealth economic conference to be held in London next November, and I believe that great things will come from a co-ordination of the efforts of the Empire on the economic front. We have a splendid record in the field of foreign affairs. The Minister for External Affairs (Mr. Casey) succeeded in negotiating the Pacific Pact, which will add greatly to the strength and security of this country. It is pleasing to learn that, as a result of a recent meeting in Honolulu that was attended by the Minister, arrangements have been made for the United States of America to take an interest in Manus Island again. When the last war ended, the Labour party would not permit the Americans to retain and develop the island as a base.

Let us consider for a moment what the alternative government of this country would have done during the last three years.

Mr Beale:

– That is too horrible to contemplate.

Mr DRURY:

– I agree that it is horrible to contemplate. We should not have secret ballots legislation, communism would be rampant in the country, we should be tied and strangled with socialization and controls, production would be at a low ebb, and inflation would be completely out of hand. In office, the Labour party has one policy only - allout socialization. Out of office, it has one policy - bigger and brighter inflation. When I heard the Leader of the Opposition speak in this debate, I was reminded of Disraeli’s saying that it is easier to be critical than to be correct. It is very easy for the right honorable gentleman and other members of the Opposition to criticize this Government, but it is noteworthy that, despite all their talk, they have not expressed a single constructive, positive or worthwhlie idea in relation to the economic front or any other front. The Leader of the Opposition quoted from a speech of his great leader, the late Mr. Chifley. Let me remind him that, in another speech, that great Labour leader warmly urged this Government to take the necessary steps, unpopular though they might be, to put the economy of this country on a sound basis. The purport of Mr. Chifley’s remarks was, “Do not worry about party interests, or about incurring unpopularity. For goodness sake, do these things “.

The arguments advanced by the Leader of the Opposition upon taxation and employment were specious and misleading. The attempt hy the Opposition to engender fear of mass unemployment is mischievous and ill-considered in thi1 extreme. Much has been said against the abolition of the land tax by the members of the Opposition. Do they intend to reimpose it if and when the Labour party is returned to power? The Leader of the Opposition has said that the abolition of the 10 per cent, income tax levy will impose an added burden upon people in the middle and lower income groups. Does the Labour party intend to increase income tax if it is returned to power? Honorable members opposite have not answered those questions, and I predict that they will not do so. The Leader of the Opposition charged this Government with doing nothing to encourage primary producers. 1 fling that charge back in his teeth, and point to the record of the Government in giving assistance to primary producers.

Another great idea of the Labour party is. to restore federal prices control. Honorable members opposite say that if we had more central bank credit and also had federal prices control, inflation would be well in hand. All that I say about that is that they have no knowledge of economics or of the effectiveness of prices control in this country. Prices control is simply a means of recording prices increases. It has already been partially abandoned by some of the State governments. I believe that, apart from a few isolated cases, this country would he much, better off if prices control were abandoned entirely. That is borne out by articles written by Mr. Colin Clark, the noted economist, and by other recognized authorities.

The Leader of the Opposition has said that our chief problem is employment. That statement shows how unfit he is to be the Prime Minister of this country. To say that employment is the main problem that faces this country is to disregard the basic problem in our midst. The inaction of the Labour government over1 a period of years, its unpegging of wages and its withdrawal of subsidies in 1948, played a major part in causing the inflation from which we have been suffering. Mr. Chifley, in one of the speeches that he delivered when Labour was in office, admitted that inflation was well under way, but he did not do anything about it. The Opposition does not intend to do anything about it either; it merely advocates more inflation. By neglecting to encourage production, by countenancing repeated Communist disruption of industry and by concentrating upon socialization of the means of production, distribution and exchange, the Chifley Government failed miserably to protect the economy of this country. It sowed the wind of inflation, and the people of Australia have reaped the whirlwind. The protection given to the Communists by the present Leader of the Opposition is well known, and I mention it only as a point of interest in relation to inflation, because nobody in this country desires inflation more than do the Communists.

The last budget introduced by a Labour government was highly inflationary. It was a deficit budget, which was balanced only by the issue of treasury-bills to the value of £39,000,000. Even now, the only policy of the Labour party is bigger and better inflation than we have ever had before. Its irresponsible propaganda proves that it is unfit to be given the great task of governing this country. The great problem with which we are faced is not employment but how to secure a greater production of essential goods. I believe that we should follow the example of the United States- of America- and the United Kingdom, and establish production committees to investigate ways and means of increasing production. I believe that much could be done in the field of incentives. If we remain true to ourselves, to our country, and to our proud ancestral’ traditions, the future of Australia is assured’. I am reminded of theclosing lines of Shakespeare’s King John -

Come the three corners of the world in arms. And we shall shock- them.: Nought shall make us rue;

If England to itself do rest but true . . .

If we’ Gan capture the magnificent spirit expressed in those lines, and apply it to ourselves and to* our own- country ; if we can return to> the time-honoured principleof a fair day’s work for- a fair day’‘S pay ; if WA are prepared1 to’ make a grand united! effort in the national interests, and to rise above petty jealousies and sectional interests; if we can maintain an optimistic outlook and have confidence in ourselves and in our country, we shall inevitably go forward into years of real prosperity and national greatness.

Mr COSTA:
Banks

.- To obtain a true picture of the present financial position in this country it is necessary to examine the last three budgets that have been introduced into this Parliament. Honorable members will recall that the Treasurer (Sir Arthur Fadden) described the 1951-52 budget as an anti-inflationary budget. He said that it would be nasty medicine, and would be nothing to giggle about. Undoubtedly, the anti-inflationary aims of that budget have been achieved in some measure because we find that to-day, according to official statistics, there are 100,000 unemployed persons throughout the Commonwealth. That is the Treasurer’s method of countering inflation. He told us quite frankly that there was too much money chasing too few goods. His method of correcting that situation apparently is to cause unemployment. As T have said, there are 100,000 unemployed persons in Australia to-day. We can assume that 50 per cent, of those are married. That means that 50,000 wives are affected. Allowing for an average family of two children, Ave can assume that a total of 250,000 people throughout the Common.wea.lth are affected by this Government’s so-called anti-inflationary measures. The budget now under discussion offers no relief. The Treasurer claims that it is an incentive budget. I cannot see any incentive in it except perhaps that the unemployment allowance is to be doubled. In other words, the dole is to be doubled. That may not be a good omen. It may indicate that in the near future big business will decide that it is better for workers to be paid a dole of £4 10s. a week than for industry to have io pay to them a reasonable living wage. The Treasurer concluded his speech on the 1952-53 budget by saying -

Democracy and free enterprise In the modern world tread a precarious path between the twin evils of inflation and unemployment. In Australia we have had experience of both within the past twenty years.

Notwithstanding the fact that we have had that experience twice in the last twenty years, the Government has taken no action in this budget to avoid a third catastrophe. I believe that the Commonwealth should be given wider powers to deal with the twin evils to which the Treasurer referred. At present, neither this Government nor any other ‘administration can do what is necessary to rid Australia of tho.se evils. Our consideration of the 1950-51 budget must be guided by the 1949 policy speech of the present Prime Minister (Mr. Menzies). He said, amongst other things, that taxes would be reduced. We can regard that as his first broken promise. Instead of reducing taxes, the Menzies Government in its first budget increased taxes. Further increases were made in the 1951-52 budget. Until the present budget was introduced, tax increases under the present Administration totalled £400,000,000. It is true that the current budget proposes tax reductions that will amount to £50,000,000, but that will still leave £350,000,000 worth of broken promises. Income tax is to be reduced by £36,000,000, company tax by £1,500,000, land tax by £6,500,000, and sales tax bv £6,000,000. The land tax. is, of course, being reduced by 100 per cent., and, later in my speech, I shall give the reason for that action. The sales tax concessions will result in a reduction of the revenue from this tax by 5 per cent. The estimated yield will decline by £6,000,000 from £117,000,000. This tax hurts the little people. Together, land tax and company tax remissions will total £8,000,000. The remission of land tax amounting to £6,500,000 will benefit 22,000 people, 600 of whom will receive the greater proportion of the remission. Their share will be £5,500,000, or 90 per cent. Other landholders will receive between them only 10 per cent, of it. Compare those substantial concessions with what the pensioners are to receive. There are in this country approximately 500,000 pensioners in all categories. Their share of the budget concessions will be £8,000,000. They form a most deserving section of the community, and their treatment at the hands of this Government, compared with the treatment of wealthy land-owners, is scandalous. It could not be more scandalous. In fact, it borders on immorality of the worst kind.

Until the Constitution has been altered we shall be able to do very little to remedy some of our most urgent national problems or to bring about the state of social security that most people desire. “When the States agreed to federate 50 years ago, they adopted a set of rules, just as a newly formed cricket club or football club would frame the rules by which its activities were to be governed. Rules are adopted in the interests of the organization that they govern, and their aim is to ensure the greatest good for the greatest number. The rules are so framed as to work simply and efficiently in the interests of the organization, and their flexibility enables them to be amended at any time in order to meet a new situation. Plain common sense dictates that such should be so. Unfortunately, the Commonwealth Constitution possesses none of those qualities. Why do we retain a constitution that was drafted more than 50 years ago to meet the conditions prevailing at that time? Today, no one would drive to Melbourne in a horse-drawn buggy. Many people consider that the rail journey, during which the train sometimes travels at 70 miles an hour, is too slow, and some persons are of the opinion that even air travel should be speeded up. Our Constitution is just as out of date in the light of modern conditions as the horsedrawn buggy is outmoded compared with the aeroplane. The provisions of the Constitution are too restrictive. The Parliament of the Commonwealth should be empowered to make any law that is necessary for the good government of the country. How different is the constitutional position in other countries that are members of the British Commonwealth of Nations! The United Kingdom Parliament has full sovereign powers. It may make a law with respect to any matter. The House of Lords is not empowered to amend a bill transmitted to it by the House of Commons.

Mr Beale:

– Is that so?

Mr COSTA:

– The House of Lords may only delay the passage of such a bill, but, in practice, never does so. The

Parliament of Canada, which meets a< Ottawa, possesses full sovereign powers.

Mr Gullett:

– There are also provincial parliaments in Canada.

Mr COSTA:

– But the national parliament has supreme authority. The New Zealand Parliament has also power to make a law with respect to any matter. Unfortunately, the Parliament of the Commonwealth lacks authority to legislate on many subjects, with the result that, under section 92, racketeers, profiteers, monopolists and monopolies may do as they please. This Parliament lacks power to pass laws in relation to terms and conditions of employment, or for the control of organized marketing on a national basis. At the present time, the living standards of the workers are threatened, and this Parliament has no power to protect them. Of course, 1 realize that this Government, even if it. possessed the power to protect them, would not raise a finger to do so. A Labour administration would explore every avenue in an endeavour to safeguard the standard of living of the workers. The Constitution does not empower this Parliament, to pass laws for the control of prices and profits.

Mr Beale:

– The people, at a referendum a few years ago, refused to grant to this Parliament power to control prices.

Mr COSTA:

– That was unfortunate. This Parliament also lacks power to control capital issues.

Mr Beale:

– How does the honorable gentleman know that?

Mr COSTA:

– If the Minister for Supply (Mr. Beale) is in doubt about that matter, let the Commonwealth’s power to control capital issues be tested in the High Court of Australia. The authority that the Commonwealth now exercises in respect of capital _ issues is only temporary, and I venture to say that if it were tested in the High Court it would be declared invalid. This Parliament has no power to make laws for the rationing of goods in short supply, or for the control of the distribution of basic materials in the interests of a great majority of the people. Because the Constitution is a written document, it is open to grave misunderstanding. This Parliament has power to pass laws with respect to the various matters that are set out in the Constitution, and the States have the residue of powers. Consequently, the tail wags the dog in these matters. A written constitution is liable to give rise to grave misunderstanding, such as occurred in the banking case.

Mr Beale:

– Does the honorable gentleman believe that the High Court made a mistake in that case?

Mr Ward:

– Yes.

Mr COSTA:

– Another misunderstanding arose on the Communist Party Dissolution Act. The Banking Act and the Communist Party Dissolution Act were the subjects of appeal to the High Court for judicial interpretation. TheChifley Government believed that it possessed power, under section 51 (xiii.) of the Constitution, which deals with banking, to nationalize the banking system. The Menzies Government considered that it possessed power under section 51 (vi.) of the Constitution - the defence power - to dissolve the Communist party. The Chifley Government had the best available legal opinion to support its view that the Commonwealth had authority to nationalize the banking system, and the Menzies Government had equally eminent legal opinion to support its view that the Commonwealth had authority to dissolve the Communist party. However, the justices of the High Court, on their interpretation of the Constitution, declared that both acts were ultra vires. Their Honours are only human, and it is possible that they can make a mistake.

Mr Beale:

– But they have the last word in these matters.

Mr COSTA:

– Their Honours did not agree unanimously that the Banking Act was unconstitutional. Two of the six justices were of the opinion that this Parliament possessed power to pass legislation for the nationalization of banking. However, Their Honours were unanimous in their view that the Communist Party Dissolution Act was unconstitutional.

Mr Beale:

– That is not so. The Chief Justice, Sir John Latham, considered that the act was constitutional.

Mr COSTA:

– It is ridiculous that the National Parliament should not possess authority to pass laws dealing with important matters which, in the wisdom of the government of the day, require such legislative action. Members of political parties and of the judiciary have recognized the need to adapt the Constitution to changing international and social conditions. Sir Isaac Isaacs, a former Governor-General and Chief Justice of the High Court of Australia, expressed the opinion in 1946 that the Constitution was outmoded. He compared it to a crippling Chinese shoe, which Australians would have to discard before they would have the power to walk upright. Sir John Latham, on the occasion of his retirement from the office of Chief Justice of the High Court early this year, said that consideration should be given to bringing the Constitution up to date. He expressed the view that section 92 should be clarified, and suggested a review of the financial relations between the Commonwealth and the States. He also made an important statement about the industrial powers of the Commonwealth. The Prime Minister said in 1942, when he was Leader of the Opposition -

Short of unification, there is much room for constitutional change by increasing the powers of the Commonwealth Government . . . My own mind has steadily developed in favour of increasing powers . . . I do believe that full nationhood requires great power at the centre, for great responsibility cannot be discharged without it.

In my opinion Australia really became a fully fledged nation when the Statute of Westminster was adopted in 1942. However, nothing has been done by the present Prime Minister, who made the statement I have just read, to give to this Parliament the full powers which it should have. In October, 1942, the present Leader of the Opposition (Dr. Evatt) truly said - Events have proved that the Constitution which the Australian people adopted in 1900 is flexible enough to the needs of war, but it is equally true that it is not flexible enough to serve Australia in peace.

I believe that in time of peace this Parliament should have power to provide for our social and national security, as it has in time of war. If the words of those who attended the conventions that were held before the Constitution was adopted are studied, it will be found that those persons considered that the powers should have gone further than they in fact go. L mention. Alfred Deakin as an example, because in my opinion he was one of the greatest advocates of federation.

Mr Beale:

– He was a good Liberal, too !

Mr COSTA:

– He was a better Liberal than is any of the members of the Liberal party to-day. The performances of our present-day Liberals are sufficient to make Deakin turn in his .grave. The Constitution that was eventually drawn up did not satisfy Deakin, who considered that it was merely a compromise. It is true that our Constitution was framed in an endeavour to assuage the jealousies of the various States.

The late Mr. Chifley once stated that Australia did not enjoy democracy as democracy is known. It was his opinion that we needed more and more democracy and that until it was achieved, in Australia and everywhere else, our problems would remain unsolved. As the Constitution is at present, it is a challenge to democracy in Australia. Although the electors may give to a political, party a mandate to carry out a certain policy, if that policy goes beyond the limits of the Constitution the mandate becomes inoperative, and this Parliament can do nothing about it.

During more than 50 years of federation, 23 alterations of the Constitution have been submitted to the people at eleven referendums. Only four of those alterations have been approved. In 1906, an alteration dealing with the machinery which governs Senate elections was approved by the people. In 1910, and again in 1928, alterations in respect of financial relations between the Commonwealth and the States were approved, and in 1946 this Parliament was given full power to administer social services. The Constitution does not even provide for a democratic method of altering its provisions. First, it is necessary for a bill to be carried by a majority vote of both houses of the Parliament. That is, there must be a majority vote in the House of Representatives and also in the Senate. A referendum must then be carried by a majority vote of the electors in a majority of the States. In practice, it means that a proposed alteration of the Constitution can -be defeated by a 51 per cent vote against the proposal in the threeleast populous States - Tasmania, South Australia and Western Australia. In effect, therefore, 10 per cent, of the total voters of the Commonwealth could defeat: a proposal to alter the Constitution. That seems a ridiculous circumstance.

The Constitution may be altered by the decision of a convention of the States provided that the decision is ratified by each of the State?. However, there are difficulties in the way of such ratification. Five of the State parliaments are bicameral. For instance, in New South Wales there is a lower house and also an upper house. Before the Constitution could be altered it would be necessary for each house of each State parliament to approve the proposed alteration. Because democratic processes do not exist in most, of the States, such a task would be almosthopeless. In Tasmania, a comparatively few people are entitled to vote on such important matters. In that State at the present time the Australian Labour party has a majority in one chamber, whereas the anti-Labour parties are in the majority in the other chamber. The Australian Labour party has only four representatives in the upper house, whereas the anti-Labour representatives number fourteen. It is necessary for Tasmanians to own a considerable amount of property and to possess certain other qualifications before they are entitled to vote for the election of a representative to the upper house.

It seems almost impossible for a proposed alteration of the Constitution to be approved unless an improved method is adopted. I believe that one way to smooth the path would be to make such a matter a non-party issue. In the past, when such a proposal has been made by a political party, it has been the practice for the other political party or parties to oppose it. In my view, the various parties should get together in order to see whether or not a constitution could be drawn up which would meet the needs of our presentday social conditions. The people could then be asked to ratify it.

In conclusion, I reiterate that our Constitution is out of date and is a challenge to democracy. Men of the highest status have declared that it is outmoded and needs to be brought up to date. The people must be made to appreciate that by widening the powers of the Commonwealth Parliament they will also widen their own powers of self-government. After all, democracy means self-government.

Mr DEAN:
Robertson

.- It has been a pleasure to listen to the honorable member for Banks (Mr. Costa). Without in any way wishing to indicate that I agree with everything that he said, 1 say that I found his address most interesting. I hope that his example will be followed by other honorable members opposite, and that they will approach the subjects upon which they speak in thu same manner as he has approached the subject of constitutional reform. This debate has proceeded for a sufficient length of time for us to see the form of attack which the Opposition, intends to adopt against the budget and the Government.

I compliment the Treasurer (Sir Arthur Fadden) on the manner in which he presented his budget. The older members of the Parliament and of the staff have informed me that the manner in which the Treasurer’s speech was received by Government supporters constituted a record in this chamber. It differed very much from the reception which honorable members opposite accorded to ‘ the speech of the Leader of the Opposition (Dr. Evatt). For three minutes I made a point of noting the reaction to the speech of the Leader of the Opposition among his supporters. I made notes concerning twenty of them. A few of them were asleep. The reception that they gave to their leader was quite different from the manner in which Government supporters listened to the Prime Minister (Mr. Menzies) last night. If Opposition members considered it to be a cunning manoeuvre to remain silent while the Prime Minister delivered his address, I can assure them that it failed. It only accentuated the enthusiasm with which honorable members on this side of the House received the right honorable gentleman.

Mr CURTIN:

-The Prime Minister is only a ham actor.

Mr DEAN:

– The honorable member for Watson (Mr. Curtin) is well qualified to say what a ham actor is like. The Opposition, in its attack on the budget, have tried to highlight unemployment and to prove that the budget will not assist this situation. As Opposition members are unable to find anything definite in the budget on which to hang their criticism, they have indulged in a personal attack on the Prime Minister. They have tried to camouflage the weakness of their case by attacking the abolition of the land tax. They have offered only one positive suggestion, and that is that more bank credit should be released.

In order to bring these matters into perspective, it is necessary to look back several years. During the years immediately after the war, when the Labour Government was in office, a large percentage of the community was earning easy money incomes and were told that they were, entering a golden age. They were told not to worry, but to let the Government do everything for them. They were quite unaware of the need foi’ a return to a buyer’s market. The price of wool during those years brought exhilaration to a large section of the community. We forgot about the competition of goods from other countries and in our enthusiasm decreased our hours of work and allowed costs to rise. One of the greatest disasters that the present Government inherited from the Labour Government was the indoctrinated public attitude which caused people to ask what the Government would do for them rather than what they could do for themselves and how the Government could help. By general election time in 1949 it had become obvious that our national policies must be changed. As a result, the carefree, unthinking wave on which Labour was riding suddenly became a dumper and the people voted in the Liberal-Australian Country party Government.

It soon became evident that we should have to cope with problems that the Labour Government had never had to face. The late Mr. Chifley himself forecast that within a reasonably short space of time the conditions in this country would give rise to a certain degree of unemployment. Some people did not like the action that the present Government had to take, but, under its regime, such words as “ output “, “ efficiency “, and “ production costs “ started to take on a real meaning. During the recess I visited several centres outside my own electorate and was able to re-inforce my opinion of the Government’s efforts with the opinions of others. I contacted people, engaged in primary production, businessmen and wage and salary earners. With the honorable member for Forrest (Mr. Freeth), I visited the Collie coal-fields in his electorate. There I asked a man what he thought of the Government’s efforts. He replied that he had been bitterly criticizing the Government for the last fourteen months until he suddenly realized that, to all intents and purposes, it had stopped inflation. He said that when he realized that fact he began to realize others. His criticism ceased and he began to use his influence to convert other people to his opinion.

Mr Haylen:

– What a charming experience.

Mr DEAN:

– It is one that the honorable member for ‘Parkes (Mr. Haylen) has not had.

Sitting suspended from 5.55 to 8 p.m.

Mr DEAN:

– Prior to the suspension of the sitting, I was indicating to honorable members my belief that one of the most difficult problems that we had to face after the socialists relinquished office was that the people had been indoctrinated with the socialist philosophy. The socialists left as a legacy an attitude in the community of “ When is the Government going to do something for me “. I believe that our true Australian attitude is quickly returning. That is, “ What can I do for the country and myself and in return how can the Government help me “. I remind the chamber that several years ago the late Mr. Chifley stated that he could see signs that there would be future unemployment in this and other countries. He also made certain suggestions about what could be done to meet that contingency.

This Government has taken certain action. I could have understood criticism of that action by the Labour party had it offered any constructive alternative to the Government’s policy. Honorable members opposite do not say a word about the chaos that would have occurred in the community if we had not planned our last budget as we did, and if we had not arranged to take the action that will be taken under our present budget. A different trend in the avenues of employment indicates that the measures taken through the last budget have been effective. For instance, this year there is increased employment in the coal industry, about which I shall say something later. There is also increased employment in ‘the steel industry, rural industries and the railway services. Those industries and services are vital to our domestic economy. Unfortunately, honorable members opposite, both inside the Parliament and, during recess, outside it, have tried to make the people believe that this Government is endeavouring to create unemployment. I admit that the Opposition should carefully scrutinize and criticize the policies of the Government, but in such a vital matter as employment it should try to be helpful rather than to instil unnecessary fear into the people in order to achieve some political advantage. The reason why the Labour party is doing this is that it realizes that only through chaos can it return to office. As the Prime Minister (Mr. Menzies) has indicated, the socialist Labour party has a vested interest in chaos and class hatred. That criticism applies not only to the members of the Parliamentary Labour party, but also to the activities of’ the officials of branches of the Labour party. To illustrate that point I shall give honorable ‘members a description of a certain occurrence in my electorate.

About a week ago the Ourimbah branch of the Australian Labour party hit the headlines because of a telegram that it sent to the Treasurer (Sir Arthur Fadden). The telegram stated that the township of Ourimbah was entirely dependent on the saw-mills in that area, which were closing down, and that men were scurrying to and fro between

Newcastle and Sydney seeking employment. No mention of this matter had been made to me, and the first that I knew about it was when I read of it in the press. I considered that as Ourimbah was in my electorate I should investigate the matter and see whether there was any truth in the telegram. Therefore, I visited Ourimbah. So far from Ourimbah depending entirely for its livelihood on two or three saw-mills, I knew that it depends on the citrus and poultry farmers in the surrounding district. However, there are two or three saw-mills near the township. The telegram had indicated that because of the Government’s alleged credit control over the building industry the men of Ourimbah had been flung out of employment. I discovered that the largest mill, and the one that had dismissed the most employees, had never been dependent on the building industry for the sale of its products. The greatest proportion of its product is in the form of case timber, and one of its largest contracts had been cancelled because of the rising costs in the timber industry. Those people who had been buying packing cases could no longer afford to do so. “While honorable members on the Government side display a full understanding and knowledge of how sensitive the community is and of the responsibilities of the Government towards employment, honorable members opposite are deliberately distorting facts. I also investigated the allegation that men were “ scurrying “ between Newcastle and Sydney in search of work. I asked several farmers, whose properties are within a reasonable distance of the township of Ourimbah, about the matter, and was informed that when they heard of the dismissals in the timber mills they considered that they would be able to get the assistance for their properties which they had not been able to get for a number of years, and which they badly needed because of the effect of fires and floods. One of the farmers said to me, “ I asked for only two men, but I could not get even one “. All those persons who have become disemployed in Ourimbah have other jobs. Only one man in the whole township of Ourimbah, came to me to ask for assistance in getting another position. When we consider the position of Ourimbah and realize how the local branch of the Australian Labour party has influenced public opinion, we realize how true is my charge against the Labour party of a general distortion of the employment position.

The honorable member for Sturt (Mr. Wilson) to-day discussed the coal industry in some detail, and I desire to add only one or two remarks to his. Too many people in the community blame the coal-miners when the industry is in a. state of ill health. Therefore, I think that now that coal production has greatly increased - as the Government forecast it would do - certain credit should be paid to both the miners and the managers. Recently it was announced in another place that coal production had increased, not only because of more and better mechanical equipment, but also because of improved industrial relations between the miners and the management. That reflects great credit upon the Government and, in particular, upon the Minister for Labour and National Service (Mr. Holt), whose efforts have been crowned with success. As a result of increased output, we now have reasonable quantities of coal at grass. Approximately 26,000 tons is held in the area that I represent. This fact is being used for propaganda purposes by the opponents of the Government, who say that its plan is to accumulate large reserves for ulterior motives. The truth is that the Government does not want to have stocks of coal at grass. It wants the coal that is produced to be put to effective use in the campaign to increase production. I have made inquiries in order to ascertain whether there is any element of truth in the propaganda, and I have been informed that the accumulation of coal is due solely to the difficulties that have been encountered in transporting it from the mines to points of consumption throughout Australia. Those difficulties involve both rail transport and shipping. There is no question of over-production and, in fact, some of the States, particularly Victoria and South Australia, have coal stocks that are below the quantities that should be held by consumers in order to enable them to provide uninterrupted services. These shortages affect particularly the railways and gasworks. Miners who have stuck to the coal industry over the years need not fear for their continued employment. These facts give the lie direct to the false propaganda that the Government, for ulterior purposes, wants to establish reserves of coal at grass. I say emphatically that the Government has no such objective. Its prime purpose is to put the coal to good use and to keep up supplies.

The war service land settlement scheme is causing great concern to supporters of the Government because of the attitude to it that ha3 been adopted by the governments of the three eastern States. Originally, the Australian Government undertook to provide the capital that would be needed to acquire and develop lands for the purposes of the scheme and to make advances to settlers for stock, plant, improvements, working expenses and so forth. The governments of South Australia, “Western Australia and Tasmania accepted that proposal, but the governments of New South Wales, Victoria and Queensland demanded absolute control of the Avar service land settlement schemes in their States and undertook to find the capital required for the acquisition of properties and advances to settlers. On its part, the Australian Government agreed to provide certain benefits for settlers in the three eastern States. Since 1.946 those contributions have amounted to more than £1,200,000.

The dual control system between the Australian Government and the agent State governments in South Australia, Western Australia and Tasmania has functioned very well and the scheme is still being accelerated in those States. However, a totally different situation exists .in the remaining States. I refer in particular to New South Wales, where the Labour socialist Government has decided that no further land shall be acquired for the purposes of the scheme this year. The Premier of New South Wales declared at the last meeting of the Australian Loan Council that he wanted £6,000,000 for the war service land settlement scheme in 1952-53, and the Commonwealth recognized its importance. But now the Premier has reduced his estimate to £2,000,000 and has blamed the Australian Government for its alleged failure to provide sufficient funds. All honorable members are aware that the total tax reimbursement to New South Wales was increased this year to £54,100,000, compared with £47,900,000 last year, an amount that was much larger than had been granted in any previous year. Notwithstanding this fact, the Premier of New South Wales now asserts that he can set aside only £2,000,000 in order to keep the land settlement scheme going. At the same time, he continues to profess eagerness to increase rural production. The situation is farcical, and it is only just that the people should realize the insincerity of the Labour socialist Government of New South Wales, which is making a mess of the war service land settlement project in that State.

The budget has been designed to meet the ever-changing conditions of our national economy, and I believe that its purpose will be achieved. Honorable members will recall the great outcry that was raised against the budget for 1951-52 and how, in the course of time, when the people realized that it was being successful, they said, “ It is a good budget after all “. This budget is of a different type from the budget. of 1951-52, but it has been designed to meet changed circumstances and I believe that it, too, will be successful. As I said earlier, the Opposition, having failed to find any sound reason for criticizing the budget, and being unable to suggest anything better than the release of additional bank credit as a means of countering inflation, has decided to launch a personal attack upon the Prime Minister. It is most unfortunate that a political party that once stood high in the opinion of the Australian people should lower itself by trying to make political capital by means of personal criticisms because of its inability to produce constructive proposals. Let it criticize the Government’s policy by all means. That is its job. But it should not demean itself by attacking the Prime Minister in the hope of damaging the Government’s cause. I am fully aware of the criticism that was directed at the present Prime Minister in New South Wales a few years ago. Such criticism was to he heard on all sides; but, in every instance, it was illinformed and was uttered by persons who did not know the right honorable gentleman.

I wish that such critics could have met him, as I did for the first time, during the general election campaign of 1949. At that time, in company with a number of honorable members from Queensland and New South Wales who are now on this side of the chamber, I attended a liberal party candidates’ convention. The present Prime Minister, who until then had been the Leader of the Opposition in this Parliament, came to the convention after a heavy week of campaigning during which he had recorded several speeches for broadcasting purposes. He monitored and led every discussion at the convention that week-end and, when it was about to close, he was asked without warning to make a final speech. He rose immediately and for 25 minutes expounded to the convention the Menzies creed. Everybody who had the experience of hearing that speech will realize the utter falsity of the accusation that he does not believe in Australia and has no faith in his task as Prime Minister. The honorable member for Melbourne (Mr. Calwell), for one, is aware of the untruthfulness of the charge. The fact is that the right honorable gentleman has an abiding faith in Australia and believes that, as the Prime Minister, he can exercise qualities that will enable him to assist in the development of the country. Supporters of the Government are not bound in any way to agree with the views of their leader. We are able to hold our own opinions and to discuss them freely. Therein lies our strength. It is only right that, at this time, when petty attacks have been launched against the Prime Minister, these facts should be made known. Our loyalty to our leader is freely given.

Mr WARD:
East Sydney

.- It is quite evident that in its budgetary proposals the Government has done some window-dressing with a view to reviving the flagging spirits of its supporters, both inside and outside the Parliament, in anticipation of the Senate election next year. The real test of whether a government is good or bad may be applied by comparing the conditions that existed when it assumed’ office with those that exist after it has been in office for some time. Honorable members opposite are fond of referring to the Labour socialist Government. I do not disown the name socialist. The Labour party is proud of its policy, and I am convinced that most people in Australia to-day would be quite content to exchange the economic instability and insecurity of the present time for the stability and security that prevailed under the Labour socialist Government in 1949. When the Menzies Government took office in 1949, Australia’s overseas trade balance was £843,000,000, a truly colossal amount. To-day, the balance is only £4S1,000,000, and the decline is due to the policy of the Government in encouraging excessive imports for the purpose, it said, of arresting inflation. The Government refused to accept the advice of Dr. Coombs, who, I understand, consistently pointed out the dangers inherent in a policy of excessive imports. The Government allowed the situation to develop to a dangerous degree. Then it stepped in and, by severely restricting imports, threw thousands of Australian workers out of employment and brought large sections of Australian industry to the verge of ruin. That policy was applied deliberately Action was not taken without a full knowledge of the probable result. 1 am not now speaking of the nitwits on the back benches who know nothing of the Government’s intentions. I am saying that the Prime Minister and certain other senior Ministers knew quite well what they were doing, and were fully aware of the almost certain results of the Government’s policy.

To-day, 100,000 persons are unemployed in Australia, without counting part-time employees who, because they are partly employed, are not reckoned to be out of employment. I refer in particular to such persons as waterside workers and tally clerks, many of whom are now working only two days a week. Even the Treasurer had to admit in his budget speech that revenue from sales tax had declined by £21,500,000, due mainly, he explained, to a slackening of consumer demand. The slackening was, of course, the result of unemployment. How can people buy when they are out of work and have no income except the miserable amount which they draw under the Commonwealth unemployment benefit legislation ?

However, although large sections of the business community have been brought to the verge of ruin by the Government’s policy, the big monopolistic enterprises which are in the special friendship of the Government, have prospered enormously. Whilst many businesses are faced with ruin, Australian Paper Manufacturers Limited made a net profit last year of £1,040,000. But that is not all they made. Companies of this kind have ways of hiding their profits. No less than £979,000 was put aside for taxation. The company took the taxation out of its profits before it declared a dividend. An amount of £535,000 was put aside for depreciation, so that total earnings under these three headings amounted to £2,554,000, an increase of £630,000 over the previous year. Broken Hill Proprietary Company Limited made a net profit of £1,957,000. Allowance for depreciation amounted to £1,128,000, and for taxation £1,275,000. The total amounted to £4,360,000, an increase of £427,000 over the previous year. General Motors-Holden’s Limited showed a net profit of £3,387,000, after setting aside £587,000 for depreciation and £3,897,000 for taxation. Thus, in twelve months operations these items totalled £7,871,000, an increase of £2,135,000 compared with the previous ‘ year. This struggling company, which the Government has set out to protect, paid to its ordinary shareholders a dividend of only 30 per cent., compared with one of 50 per cent, the previous year. It is evident that the big companies made record profits during a year when honorable members opposite were asking the small business men and the workers to accept sacrifices.

One of the many broken promises cf the Treasurer was that he would introduce an excess profits tax, and that it would be retrospective, but suddenly the proposal was dropped. The right honorable gentleman cannot claim that the proposal was impracticable, because in Great Britain such a tax was recently imposed, and it was made retrospective to the 1st January of this year. The

Treasurer has admitted that in 1949 the country was prosperous. Speaking of a later period he said -

The wave of accidental prosperity in 1950-51 bade fair to engulf us.

What a tragedy! The community was about to be engulfed by prosperity, so the Treasurer introduced his horror budget. Later, because of a succession of defeats in by-elections, the Government announced’ that it proposed to honour its promise to reduce taxation, and we have been informed that the 10 per cent, super tax, which was imposed last year, will be abolished. As the Leader of the Opposition (Dr. Evatt) pointed out in a splendid, analytical speech, taxpayers in the lower and middle income brackets, even after the removal of the super tax, will be left relatively in the same position as they were under the previous year’s horror budget. Most people, because of the increased basic wage, and automatic increases of salaries, will have moved into a higher income group, and will thus be liable to pay more tax. They will suffer a shock when they receive their next tax assessments, and find that they will be obliged to pay as much, or more, tax under the new rates as they paid during the previous year. The increase of £100 or so in the basic wage each year is given to offset the higher cost of living, but it does not cover the additional taxation deductions that follow and actually many taxpayers will be worse off than they were under the horror budget of last year.

I invite honorable members to examine the provisions of the budget to see whether there has been any real reduction of taxation by this Government. In the 1949 general .election campaign the LiberalCountry party candidates said that taxation had to be reduced. They said that it was too high, that it was crippling commerce and industry and that it was preventing people from getting upon a sound basis in their daily lives. Honorable members should compare the figures. In the last budget of the Chifley Government, that of 1949-50, sales tax totalled £42,424,000. Under the horror budget of the Menzies Government, in 1951-52, sales tax yielded £95,458,000. In this budget, sales tax is estimated to yield £88,000,000. iSo even taking into account the reduction that this Government claims to be making in sales tax, it will take from the Australian consumers by that impost £45,575,000 more than was taken by the Chifley Government in 1949. I shall refer now to personal income tax and social services contribution. Under the Chifley Government, those taxes totalled £195,976,000 in 1949-50. Under the horror budget of the Menzies Government of 1951-52, the total yield was £400,333,000, and this year it is estimated to total £384,000,000. In effect, therefore, the Government will be taking this year from the Australian taxpayers £188,023,000 more than was taken by the Chifley Government in income tax and social service contributions in 1949. The total tax revenue under the Chifley budget was £504,387,000. Under the Menzies budget last year, the total was £919,027,000 and this budget provides for taxation totalling £863,650,000, an increase over the Chifley budget in 1949-50 of £359,262,000. As a matter of fact, the increase would be even greater than that and the disparity would be wider but for the fall of customs revenue last . year because of ‘ import restrictions. The figures show this Government in a more favorable light than an examination of the facts would reveal.

I do not propose to go into all the provisions of the budget, for in my opinion they have been properly criticized by honorable members on this side of the chamber. Age and invalid pensions under the Chifley Government reached a rate that was equal to 39 per cent, of the basic wage, but now such pensions are down to 27.8 per cent, of the basic wage even after taking into account the increase that is to be given under this budget. As the honorable member for’ Eden-Monaro (Mr. Allan Fraser) has said, the pension to-day should be £4 9s. a week to put the pensioners back where they were relatively in 1949, having regard to the depreciated value of the currency. Was it not this Government which promised that by 1952 it would introduce a new scheme under which the means test would be’ abolished? Not only has the Treasurer failed to propose methods of abolishing the means test, but he has also failed to make any mention in his budget speech of any move to liberalize it in any degree. The Australian Council of Trade Unions has made a close examination of unemployment and sickness benefits. It has found that if those benefits are to be of the same value to-day as they were in 1946 when they were introduced by the Labour Government, they should be 62s. 6d. a week for a man, 50s. a week for his wife and 12s. 6d. a week for the first child, so that a family of a man, n wife and one child would receive a total of £6 5s. a week.

Honorable members know that the Government has decided to repeal or relax some sections of the company tax law. It has also decided to vacate the field of land tax. That will be of great benefit to newspapers, breweries and private hanks, but it will be of very little assistance to country interests and primary producers. The Government has made a great feature of its new income tax concessions in relation to education.” The remission will be £50 for every child who is receiving full-time education up to the age of 21 years. How many workers will benefit from that concession? Any person who can keep his child at a university, a college or a school to the age of 21 years must be in the higher income group and does not need assistance. That provision will be of no real assistance to the workers and to taxpayers in the lower wage groups. In the budget, the Government has provided for remissions of taxation totalling £49,578,000, but of that amount, according to a conservative estimate, £21,250,000 will go to wealthy companies in concessions of various forms.

Honorable members on the Government side decry talk of a depression. They charge the Opposition with talking about a depression deliberately to gain political advantage. Do honorable members on the Government side believe that there is any need to convince 100,000 unemployed persons that there is a depression? Is there any need to convince those members of the business community who have been compelled to sack employees because they cannot profitably employ them? Is there any need to convince these people that the” depression is actually here? A depression has arrived, and its effects will become more accentuated a.s time passes. When I first stated that 1.00,000 persons in the community were unemployed, an honorable member opposite said that that figure was an exaggeration. I invite honorable members to examine my statement. When I first used the figure of 100,000 recently, it was not a mere guess. It was based on the calculations of high-ranking officers of the Department of Labour and. National Service who’ were able to give me an estimate. They told me the exact position. They are not able to give the information officially to me, to the newspapers or to the Australian community because this Government, which claims that the Opposition is exaggerating the situation, refuses to allow the information to be made available to the public. If the Government were able to produce records to refute that estimate, would it not do so ? The Minister for Defence (Mr. McBride) admitted in reply to an inquiry by me that there were 43,000 persons registered as unemployed. Honorable members will agree that even daily figures cannot he regarded as accurate at the time they are used because the position is becoming worse each day. The Sydney Morning Herald to-day reported that 1,911 workers’ had lost their jobs in a week and that the total recipient? of unemployed benefits had risen by SS per cent, in five weeks. So it is no exaggeration to say that the number of unemployed persons is increasing at the rate, of 2,000 a week. That figure has been stated by the director of the Associated Chambers of Manufactures of Australia, Mr. L. Withall, and his estimate appears to coincide with, the statement that was published in the Sydney Morning Herald.

The Prime Minister claimed that 4,000 now jobs were being found by the Department of Labour and National Service each week. Where are they? Where are the men being placed? Why does not the Government give the committee that information? When the Opposition asked where 32,000 alleged vacancies were to be found, the Government refused to give detailed information. The number of recipients of the unemployment benefit is no guide to the extent of unemployment in this community. Because of the rigid means test, many people who are unemployed are unable to qualify for the unemployment benefit. Some of them believe that if they have saved a few pounds they are ineligible for the benefit. Many of them, instead of obtaining the benefit, use their savings in the mistaken belief that they are ineligible for the benefit, and savings bank deposits are reduced accordingly. When men report to the unemployment offices to register as unskilled labourers, process workers or general labourers, they are usually told that already hundreds of persons in those categories have been registered and that there is little prospect of obtaining suitable jobs through the agency of the Commonwealth Employment Service, and they do not register. When I made an inquiry into the subject, of unemployment the officers of the Commonwealth Employment Service informed me that there were approximately 100,000 unemployed persons in Australia. Evidently the Government expects unemployment to increase because, whereas expenditure on the unemployment benefit in 1951-52 amounted to £1,007,657. an amount of £3,136,000 has been provided foi-‘ that purpose in the budget. Thus, the amount provided, even taking into account that the rate of benefit is i:o be doubled represents an increase of more than 55 per cent, over the s mount expended last year. Not all those who are out of employment to-day are unskilled workers as the Government would have us believe. On the 2nd August last, the Sydney Morning Herald, in an article headed “ Jobs Grow Scarcer “, published the following report : -

Officers at the central bureau of the Commonwealth Employment Service in Sydney said yesterday they were unable to offer a job anywhere in Kew South Wales to a carpenter, bricklayer or unskilled worker.

That statement was made by officers of the Commonwealth Employment Service. Although the Prime Minister knew the situation that exists, and that it was deliberately brought about by his Government, he called upon the people, when he delivered his so-called message to the nation in Brisbane recently, to quit grumbling and get back to work. At least 100,000 of them want to get backto work, but his Government refuses to provide work for them. In order to prove the truth of my assertion that the Government deliberately engineered the existing unemployment situation for its own purposes I propose to read some newspaper extracts. On the 31st January the Melbourne Age, in an article headed Threat to Jobs ‘ Nonsense ‘ “,. published the following statements : -

Senior Federal Ministers claim that talk of the Government’s economic policy producing unemployment is “nonsense”.

The article bore a Sydney date-line. On the day upon which it was published the Prime Minister was in Sydney. Iunderstand, from veryreliable information, that the right honorable gentleman was the senior Minister who released the statement to the press. The article continues -

According to a high government authority to-day, Australia is in no clanger of serious unemployment for at least ‘ a generation. “ What, is happening “, he said, “ is some disemployment - temporary idleness during changes of occupation.

This results from less essential and less efficient industries being squeezed by the economic policy and forced to reduce staff. It was a deliberate part of the policy of the Government to squeeze those which it regarded as less efficient and less essential. The article continues -

Therefore by pressure of government economic policy it is better to re-organize industry through disemployment than wait until after there is a crash.

It is quite evident that unemployment was deliberately brought about as a part of the Government’s policy. Mr. C. E. Hall, the director of the Chamber of Manufactures of New South Wales, com menting on the press statement which, as I have said, was apparently issued by the Prime Minister, said -

None but a dangerous fool could conceive that in the clothing and textile industries there was a pool of labour, which, when released by “temporary idleness”, would flow to “ undermanned basic industries “. . . . The error and the tragedy of these artificially organized “ recessions “ is; that financial policies do not distinguish between what theorists refer to, but never list, as nonessential industries and essential industies.

These statements prove beyond doubt that the Government brought about the present situation as a deliberate act of policy.

The Prime Minister has endeavoured to explain the unemployment position by saying that we have “ priced ourselves out: of overseas markets “. What did the right honorable gentleman mean by that phrase? Surely he did not mean that we had priced ourselves out of overseasmarkets because the costs of management and bank interest rates are too high. That the right honorable gentleman does not regard those charges as excessive is demonstrated by the fact that the Government recently permitted the private banks to raise interest rates, the added burden of which must add to the costs of industry and increase prices generally. Evidently the right honorable gentleman was referring to wages and hours of work.. The Treasurer has told us that the fixation of wages is a matter not for the Parliament but for the Commonwealth Arbitration Court and that the basicwage case is now sub judice. Apparently the Government hopes that the court will reduce the basic wage and destroy the 40-hour working week. The Minister for Commerce and Agriculture (Mr. McEwen) who is present at the table, knows that the costs of industry cannot be reduced while the Government adheres to its present policy. He himself believes in a clearer food policy. When he was pressed by the Opposition to state his policy on the price of primary products he repeatedly referred to the world parity price. On one occasion he said that if the. price of primary products were increased, local consumption would be reduced, and, in consequence, greater quantities would be available for export, and that the increased volume of exports would help us to correct our overseas financial position. What a strange line of reasoning!

Let us examine this matter of high living costs and low wages. Supporters of the Government object to. what they regard as automatic variations of the basic wage which, they claim, are responsible for our present inflationary position. They completely overlook the fact that adjustments of the basic wage follow and do not precede price changes. If we had effective Commonwealth control of prices - and only Commonwealth control of prices can be effective - and if prices were stabilized, there would be no need to worry about automatic adjustments of the basic wage. The basicwage would then remain at a constant level. In order to illustrate the strange outlook of honorable members opposite on the matter of prices I shall ‘ quote from, an article that was published in the Sydney Morning Herald soon after the recent large increase had been made in the price of butter - an increase not reflected in the recent basic wage adjustment. The article reads as follows : -

Good table margarine provides a palatable and nutritious substitute foi- butter. It is widely consumed in other countries, and there is no doubt that it would be popular here, if the public were permitted to buy it freely. Local manufacturers could greatly expand their output, using vegetable oils from New Guinea. The State Government should abolish this obsolete ban on a healthy and necessary foodstuff.

The DEPUTY CHAIRMAN (Mr. Bowden). - Order! The honorable member’s time has expired.

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

[8.49]. - The honorable member for East Sydney (Mr. Ward) has misrepresented the Government, and, to some degree, my own views on rural policy. When his time expired he was about to develop the story of margarine. I say to him and to his colleagues that the only governments in Australia that have sought to replace Australian-produced butter with margarine produced by coloured labour in the territories have been the Labour governments of New South Wales and Queensland. If the honorable member desires to defend the living standards of Australians he should harangue, not this Government, but his colleagues in the governments of those two States. He should put it to them that it would not he a had idea if they started to protect the standard of living of the Australian dairyfarmer against the competition of margarine produced by black labour.

I shall not attempt to follow the honorable member through the diatribe of distortion in which he engaged from start to finish of his speech. His remarks consisted of untruths and misrepresentations. In his opening remarks, he declared the Labour Government had left to the Menzies Government a credit balance in our London funds of £800,000,000. That is completely untrue; and the honorable member has sufficient intelligence to know that it is untrue. The facts are that the day after this Government came into office our London funds stood at £50S,300,000 and that under the administration of this Government that balance was increased to £800,000,000. To-day, although the Australian people have enjoyed in their living standards the benefit that resulted from the importation of a prodigious volume of goods, our London funds still stand at £563,000,000. Therefore, I do not intend to follow through the distortions, half-truths and misrepresentations of which the honorable member’s speech was composed.

Dr Evatt:

– Did the Minister say that our London funds to-day amount to £563,000,000?

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– No, I did not. 1 said that the day after this Government assumed office those funds stood at £508,300,000 and that to-day they stand at £363,000,000. I think I said that they now stand at £363,000,000 ; but, in fact, they amount to £362,000,000.

Mr Bryson:

– The Minister said that they now amount to £563,000,000.

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– I suggest to members of the Opposition that if, inadvertently, I said £563,000,000-

Mr Pollard:

– When the Minister does that kind of thing, he does it inadvertently; but when the honorable member for East Sydney does it, he does it dishonestly!

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– The _ truth is that members of the Opposition who make great play about employment and unemployment completely disregard the fact that full employment cannot be provided merely by passing resolutions. The main contribution that the Leader of the Opposition (Dr. Evatt) has made towards full employment has been by having resolutions on the subject passed in the United Nations and in other assemblies. Full employment can be provided only in a healthy economy. The fact is that when this Government came into office it inherited an unbalanced economy. It was confronted with a state of affairs that Labour had deliberately planned and organized - I do not say maliciously - to produce an unbalance in our economy. Those plans contained the germs of unemployment. The Labour Government, towards the end of World War II., and in all its administrative acts after the end of that war, concentrated its attention entirely upon the expansion of secondary industry in this country and thus produced a state of affairs in which the rural labour force was allowed to run down and rural industries became under-capitalized and ill-equipped. Labour concentrated its attention entirely upon the manufacture of vacuum cleaners and all kinds of whatnots because such a policy would increase the number of factories and result in a corresponding increase of factory employees. So, in the economy that this Government inherited, there was a plenitude of factories which, in the main, were engaged in the production of non-essentials with the result that a few months after the Government came into office it was found necessary to import butter and a whole range of common agricultural products, such as potatoes and onions, from all corners of the world. Under such conditions, how could a government be expected, in a few years, to restore economic stability? It has fallen to the lot of this Government to endeavour to correct the effects of the muddled planning of Labour towards the end of the recent war and during the immediate post-war period. Labour always confuses the idea of- full employment with that of full industrialization; but they are not the same thing at all. lt is true that more workers can be employed in factories than on farms, but if we so organize our economy as to make it unattractive to farm workers there can be no real stability of employment in our factories and no assurance that the country will be capable of importing from overseas the essential requirements of a modern community which, unfortunately, we are not able to produce. We shall not be capable of importing such commodities as petrol, oil, rubber, coffee, drugs and specialized machinery unless our economy is sufficiently healthy to enable us to export to the degree that we wish to import. That fact illustrates the necessity to expand our export industries. I shall cite a few illustrative figures. In 1939, the value of our imports averaged £18 9s. per capita of our population. Values have since increased, and to achieve a corresponding rate of imports to-day this country would require to have funds overseas, or, in other words. to export goods, to the value of £55 7s. per capita of our population. However, the actual value of our imports in 1951-52 was £123 per capita compared with £18 9s. per capita in 1939. This tremendous increase in the value of our imports reflects the country’s developmental progress and our high standard of living which, in turn, are expressed in increased purchasing power. The volume of imports has increased on a per capita basis by 120 per cent, over the pre-war level. During the same period, our population has increased by 24 per cent. These two factors taken together have led to an increase of 175 per cent, in the total volume of our imports compared with the pre-war level. Let us concede, however, that last year’s level of imports, even allowing for the import restrictions, was abnormal. Let us assume that instead of an abnormal 175 per cent, increase over the pre-war demand, we must plan for, say, a 100 per cent, increase. On that assumption, let us examine the volume of exports necessary to pay for imports at that target .rate. The facts of to-day’s export income are that, while we are thinking of a value per capita of imports 100 per cent, greater than pre-war, our actual volume of exports at the moment is only 9 per cent, greater than pre-war. These simple figures illustrate the imperative need to expand the volume and value of our exports if we are to have a healthy economy and be able to import goods at the level demanded by a modern community.

In the foreseeable future we will continue to depend mostly upon primary products for export income. From the figures I have mentioned a theorist could compile a nice target of production necessary to be achieved to attain our objectives. However, we are not theorists, and we are not compiling and propounding a target based upon our desires. In close consultation with the primary industry organizations and the State Departments of Agriculture, which have the most intimate contact with the individual producers, the Government has compiled a target of expansion of exports over a five-year period. It is a programme that we believe can be fulfilled rather than one based merely on desire. For the purpose of ascertaining whether this programme will be adequate for our requirements we have estimated that, on the basis of to-day’s values for our exports, in five years’ time our export income will have increased by £100,000,000 per annum. At the present rate of growth of our population that increase of exports would be much more than sufficient to meet the import demand of the assumed population five years hence after satisfying our domestic needs. However, the important point to be borne in mind is that, although for convenience we have planned a five-year target, this stimulation of export production must be continuous, and if we really devote ourselves to these objectives, we shall, at the end of five years, have developed a tempo of increased production that will enable us to increase our exports at a much faster rate after the first five-year period.

It is obviously essential to recognize, as Labour has always failed to recognize, that there can be no real health in our economy, no stability, no assurance of full employment, and no assurance of maintaining a reasonable standard of living, unless we produce and export, in volume and in value, a quantity of goods that will take care not only of what we need for our own consumption, but also of what we desire to export. It is in recognition of that simple state of affairs that wc have planned. We have really got to work on this problem of the run-down primary industries, which are short of capital, after war on top of depression, and short of labour and equipment, as a result of Labour’s policy, to which I have referred. The problem of increasing prices has been reflected in a low level of incentive on the farms themselves. Our approach has been first to re-establish incentives to produce. This is not - and [ hope it never will be - a country where we can order the people to produce, particularly in the primary industries. Our volume of wealth and production must come from the inspiration of the individual to engage in production, to work, and to risk his capital. There must be a prospective profit for him. That is a fundamental requirement for the solving of this problem. Secondly, this Government recognizes that in a federation like ours the States have a transcendingly impor- tant role to play, because they constitute the point of contact with the individual producers.

This Government has altered the arrangements for meetings of the Australian Agricultural Council. Instead of always requiring State Ministers to come to Canberra to attend the meetings, we have adopted the policy of going to the States. In a practical way we recognize their status by arranging meetings of the Australian Agricultural Council in the State capitals. Our approach to a solution of the problems dealt with by the council is to assure the individual farmer that there will be a prospective profit in his activities, that he will be allowed to reap the fruits of his labour, that there will be assured, markets for his production at prices profitable to him and that the fruits of his labour will not be disproportionately taken from him in taxes. Having established the incentive, we will see that the physical requirements of production, such as credit, labour, fertilizers, farm equipment and farm developmental material are available. Finally we will see that the aids of science are employed to secure the maximum efficiency on the farm, and ensure that the fruits of scientific investigations do not find a resting place in the pigeonholes. A practical and effective extension service will be provided to the farmers.

The policy of this Government is to provide an incentive to produce, founded on a prospective profit; to assist in supplying the physical requirements of production; and to see that the maximum possible efficiency in production is achieved. In its two and a half years of office this Government has established an enviable record not only of propounding a policy but also of putting it into effect. The extraordinarily profitable prices that the wool-growers enjoyed last year were no sheer accident. They were the direct outcome of the in flexible insistence of this Government that there should not be an organized interference with our wool auction system, which was proposed first by the United States of America, and later by a meeting of all of the consuming countries. It was first proposed by the American Ambassador who called on me almost two years ago this week. He told me that his Government, having regard to the outbreak of the Korean war, intended to endeavour to arm not only the United States of America, but also to inspire the Western. democracies to arm. He stated that, having regard to the demand for wool that this would cause, his Government desired that the Australian Government should convene a meeting of the wool-growing countries in London three or four weeks later for the purpose of allocating the world’s wool and deciding the price of it. The Australian Government sent me, at three days’ notice, to argue, first in london, and later in Washington, in defence of the auction system. It is history that the auction system survived that planned interference with it. Thi3 is the complete explanation of the high returns that were enjoyed by Australian and other dominion wool-growers in the year 1.950-51.

Mr Keon:

– Did the Minister’s attitude reflect what the Russians wanted ?

Mr McEWEN:

– The honorable member for Yarra (Mr. Keon) might be a better judge than I am of that aspect of the matter. Frankly, I am not in touch with the Russians. This Government ensured that the wheatgrowers received a higher return for their product. It ensured also that a very inadequate and, if I may say so, unfair dairy stabilization plan introduced by Labour, was replaced by a fair and adequate five-year stabilization plan. Meat prices have been increased under a longterm agreement negotiated with the

British Government. That agreement was proposed first by our predecessors in office, but it was negotiated to finality by this Government. It was not negotiated by us because Labour started it, or because we thought it was a bright idea, but because the people whose property was at stake - the Australian meat producers - asked us to negotiate a five-year agreement. That has been our approach to every one of these industries.

Recently, negotiations for a new International Wheat Agreement took place Australian wheat is the property, not of this Government, but of the Australian wheat-growers and. therefore, in London, where the negotiations were conducted, a representative of the Australian Wheat Growers’ Federation, nominated by that organization, sat with the Government negotiators. The recent negotiations in connexion with butter, meat, canned fruits and dried fruits, were conducted by representatives of the primary producers concerned. We have reestablished the state of mind that is necessary to production. The primary producers of this country know that this Government does not consider itself to be the owner of their produce, but recognizes them at all times as the owners and treats them as principals. With the leave of the committee, I shall incorporate in Hansard a table that sets out the variations of the prices of important primary products that have been arranged during the period of office of this Government. It is as follows: -

Let me deal briefly with taxation. To-day, levels of taxation are much, lower than they were towards the end of the last war. I do not claim that as something to the credit of this Government; T state it as a fact. Taxation had to be high when we were fighting the most expensive war in history. The Labour party is attempting to persuade Australian primary producers and other people to believe that to-day taxation is at an all-time high level, but the truth is that this- year Australian taxpayers will pay less in taxes than will- taxpayers in New Zealand and the. United Kingdom with comparable incomes. . That, remark applies also to last year. This year,, an Australian taxpayer without dependants who has an income of £5,000 a- year will pay £2,088 income tax, compared’ with £3,500 towards the end of the war. Taxation now is lower than it was then, and we shall decrease it further as fast as we can..

We shall; not attempt to inspire production by introducing discriminatory rates of income tax that favour primary producers, but we shall employ the instrument of taxation properly to give relief and’ encouragement to them. It is a. matter of history that the modification!, at first administratively and later by statute, of the! provisional taas system which, this Government inherited was done in the interests’, of primary producers: Tremendously important alterations of the provisions relating to- depreciation allowances om farm equipment, farm workers’ homes and farm structures have been introduced by this Government.. We are giving’ to primary producers greater concessions than any other government has given. We are employing’ the1 instrument of taxation to- stimulate increased production.

I turn now to the physical requirements of primary industries. Let me deal first wife labour. In our immigration programme, emphasis is placed upon the selection of immigrants with rural experience who desire to go on to the land and stay there. Immigrants, in camps have’ been directed to harvest crops that require seasonal labour: The Com.monwealth Employment Service is engaged constantly in selecting workers for rural industries1 and’ placing them in jobs. But it must fee recognized that; in the circumstances of to-day, when our population1 is 1,000.00* greater than it was1 in 1939 and1 there are 40,000 fewer workers on- the land than there were them, immigration alone cannot solve our’ problems. It has been stated to me that no Australian factory produces luxury or non-essential articles, but the cold’ truth is that we cannot continue to produce some things that are not very essential and fail to produce enough of our export com modities to enable us to achieve a balance of payments1. There must- be a transfer of emphasis from some of the less essential products to primary and. basic products. We have employed unashamedly the instruments of credit and of sales tax administration as weapons of economic policy in an effort to place the appropriate emphasis on the production of essential requirements. This Government does not want to see bunk-house labour employed on farms. We are giving valuable tax concessions to farmers- as an incentive to them to build! proper- homes for workers on their farms and to employ married men with children, so that they may have a stable labour force, rather than the itinerant bunk-house’ class of labour. That, is our policy and. that is our approach to the problem.

I am dealing still with, the physical, requirements of primary industries: The Government has organized, the. production of fertilizers. Where necesary, it has guaranteed the overdrafts of. companies which, upon our request, have agreed to expend vast- sums of money to increase their output of fertilizers and to use local sulphur products, rather than, imported products. It has organized the importa-tion of. agricultural machinery from dollar and sterling areas, and is assisting our own factories to produce more agri-cultural machinery by trying, to provide them with a full labour force, consisting partly of immigrants supplied by the Commonwealth’ Employment Service: We- are trying- to avoid1 spending good Australian money upon imports’ of Japanese- corrugated iron when we can produce all the iron we need in Newcastle and Port Kembla if we supply the works there with enough labour and coal. Similar remarks1 apply to other’ basie materials. This’ Government has approached the problem- realistically. Finally; we must- make available to our farmers the most up.-to-date knowledge that science and technological investigations can provide.

With the, leave of thoi committee,. I shall’ ‘ incorporate in Hansard a short table showing, the changing age structure of the labour force, engaged, in agricultural occupations,, which shows that primary production is becoming increasingly an occupation in which aged rather than young men are engaged. The table is as follows : -

This year, £2,000,000 will be provided for research work by the Commonwealth Scientific and Industrial Research Organization. Investigation is not enough of itself. The results of the investigation must be made available to farmers as fully and as quickly as possible. In the United States of America, one research worker is employed for each 1,000 farmers. In this country, the proportion is one to 2,000.

The TEMPORARY CHAIRMAN (Mr Ryan:
FLINDERS, VICTORIA

– Order! The Minister’s time has expired.

Mr BIRD:
Batman

.- We have listened to a very interesting dissertation by the Minister for Commerce and Agriculture (Mr. McEwen) on the vicissitudes of primary production. He has spoken in some detail of the present difficulties of the man on the land; but, so far as I can see, the nigger in the woodpile is that the budget does not offer any real solution of such problems. No attempt is made in the budget to induce more people to undertake farming. There is no mention of any scheme calculated to give interested young Australians a chance to go on the land. The problem of declining rural production to-day is due largely to the labourfactor, and until the Government is prepared to place before this Parliament, and to discuss with the State parliaments, which, of course, have the power to acquire land, concrete proposals to solve the labour problem, the increase of food production that is so earnestly desired by all sections of the community will not be attained. I shall deal with that matter at some length later in my speech. At this stage it is sufficient for me to say that although the Minister for Commerce and Agriculture has spent some time beating the air and enumerating the difficulties that confront primary producers, he has not advanced one tangible suggestion for bringing to rural areas the young and enthusiastic men who are at present being denied an opportunity to engage in farming.

The Treasurer (Sir Arthur Fadden) undoubtedly found himself in an extraordinarily difficult situation when framing the budget. That situation resulted, of course, from the Government’s own policy. It is of no earthly use to blame international conditions or other factors over which the Government has had no control. The fact remains that the extraordinary crisis through which we are passing to-day is of the Government’s own making. The Government knows that, during the last few months, it has been losing supporters by tens of thousands. Large numbers of its erstwhile supporters have turned against it, and journals of national repute that had supported the Government through thick and thin, are now printing blasts of criticism that were unheard of eighteen months ago. For instance, the Melbourne Age, which had supported the present

Government ever since its election, is now very critical of it. I have before me a leading article that was published in the Age on the 1st July. Probably the Treasurer realized when he read this article that he was up against a serious problem. The heading is “Electors resent loose pledges “ and the article states, amongst other things -

In the 194!) elections the winning parties used persuasive devices and made rash, even foolish, promises which doubtless greatly influenced many people at the time, conscious of increasing inflation and the diminishing purchasing value of money. The non-fulfilment of these undertakings has been a cause of sharp and widespread disillusionment. From the standpoint of integrity in public life, the tragedy was that these unredeemed pledges were not only unwise, but unnecessary even as “ window dressing “, for the reason that in 194!) a change of government would have occurred through the normal working of the political swing, without attempts to delude the people with lavish or reckless undertakings.

Prominent among these was the egregious assurance that if the people were to change their government, the new office-bearers would restore value to the £1. Another was the hope and expectation deliberately fostered by the winning parties that their accession to office would signalize a substantial lowering of taxation.

Doubtless, Government supporters perused those comments with considerable disquietude because the article demonstrated beyond any shadow of doubt that many people who had supported the Government were completely fed up with it. The Treasurer probably realized that he had to produce something out of the hat to regain the allegiance of people who, during the last nine months or twelve months have become absolutely disgusted with the tactics and the policy of the Government. I sympathize with the Treasurer in the dilemma that confronted him when he attempted to frame the budget, but T certainly dissociate myself completely from the remedies that he has prescribed in that document. When the right honorable gentleman got down to fundamentals in planning, he realized, no doubt, that his initial task was to correct the errors of last year’s budget. Those errors were as numerous and as varied as the loaves of autumn. Criticism of the 1951-52 budget, so aptly termed a “horror budget” by the honorable member for T>°t Sydney (Mr. Ward), had been voiced by every section of the com munity. Nearly all the Australian people realized its gross imperfections. Its aim, we were told, was to control inflation, which was eating into the very vitals of the Australian economy. It proposed to do that by three methods. The first was to increase both direct and indirect taxes ; the second was to restrict credit, and the third was to divert our productive resources from luxury industries to essential industries.

It is widely recognized to-day that the much heralded and widely publicized 1951-52 budget has failed. Everyone knows that inflation has continued its undisputed progress. Not only has the three-pronged policy that I have mentioned failed completely, but also it has had a most deleterious effect on the Australian economy. For example, the sharp increases of the sales tax last year caused unemployment and alarm in many reputable business enterprises. The credit restriction policy has caused :> decline in the building of houses. It has stultified the spirit of initiative and incentive of which honorable members opposite speak so proudly almost daily, and it has delayed indefinitely important public projects that are essential to the development of this country. The horror budget did not produce any appreciable diversion of productive resources from luxury industries to essential industries. The expected transfer of labour from luxury industries to essential industries has not taken place. Daily we hear of essential undertakings that are finding difficulty in providing work even for employees of many years’ standing. There are fewer openings for employment in both primary and secondary industries to-day than there have been for many years past. In short, last year’s budget has failed completely. Prevalent throughout the whole community is a feeling of uneasiness and uncertainty. The Treasurer himself admitted that in his budget speech last week. He said that hundreds of thousands of people were apprehensive of the future. That was indeed an admission from the right honorable gentleman. Realizing the abject failure of his 1951-52 horror budget, and seeing its repercussions at elections throughout the Commonwealth at which Labour candidates have been elected b; unprecedented majorities, ‘and have even been successful in winning some seats for the first time in history, the Treasurer has changed his tactics. He is now seeking to regain the rapidly -warning confidence !of the Australian people.

An examination of the budget leads me to the conclusion that the Government intends it to he a psychological budget. Its purpose is to regain for the Government the confidence of the Australian people, and primarily of the business community. However, stock exchange reports issued during the first two or three days after the introduction of the budget, showed not a scintilla of movement in share prices that could be construed as evidence of increased confidence on the part of the business community. Had the budget gained the confidence of the business community, that fact would have been reflected immediately in. an upward trend on the stock exchange, but there has . been -mo upward trend. Obviously, therefore’,’ the budget has failed to have any psychological effect on the community. The Treasurer said in his budget speech that he ‘based the budget on three “broad considerations. Speaking of the first of these, he said -

We are, therefore, making certain adjustments and proposing certain reductions in taxation .which will ‘serve as an incentive to .investors and business men and to the community at large.

That .statement would find general agreement if the “ adjustments “ were to be applied equitably and objectively. The severity of taxation in the 1951-52 budget was beyond the bounds of prudence, and in .view of the greatly changed economic conditions, the widespread reduction of purchasing power, and tha curtailment of public and private employment, tax reductions are absolutely necessary ; but when one analyses the Government’s taxation proposals one can only be filled with .a sense -of profound msappointment. The reductions ‘of income tax are trifling, and as .both the Leader of the Opposition (Dr. Evatt) and the honorable member ‘for East Sydney have pointed out in this debase, a confidence trick is being perpetrated on the people. When taxpayers receive ‘their assessments for the current financial year they will find that there has been no real reduction -of income ‘tax. Company tax relief is infinitesimal. The reductions of sales tax, whilst “they .are welcome, will mot counter the unfortunate effects of last year’s severe rates <on many reputable industries.

The Government has claimed credit for the proposal to -abolish the land tax, the receipts from which amounted to iE6;000;000 ‘last year, -and confidently asserts .that -the remission will act .as ami incentive to primary producers. Let us examine who will foe the recipients of this ‘bounty. They will he, not the struggling farmers, but .the wealthy city land-owners. The honorable member for Lang (Mr. Mulcahy) informed the House this afternoon that the Rose Bay Golf Club, which is in his electorate, will be absolved from the liability to pay £17,000 this year, which is the amount of land tax that it has paid annually to the Commonwealth Treasury. Yet the Government claims that the remission of land tax will be an incentive to primary producers to increase production. The brewery interests in Sydney, which own a chain of hotels, find to their profound delight that they will not be required to pay £1,000,000 in land tax. In essence, we .find that the greatest part of the receipts from the land tax has been paid, not fey the struggling farmers, but by wealthy city commercial interests. Consequently, the repeal of the land tax will not be a .substantial factor in accelerating primary production. The taxation proposals of the Treasurer indicate a complete absence -of regard for sound ‘financial practice.

The second consideration mentioned by the Treasurer was the financing of Commonwealth capital works. The right honorable gentleman said -

Indeed, if the state of the loan market and the willingness of the people to save and invest would -permit us to -do so, -we would have ‘justification for financing our own Commonwealth capital .works from -loan -sources and not from the .proceeds of taxation.

I .can understand perfectly well the Government’s concern about this matter, because the reaction of the public to Commonwealth loans -has been anything -but desirable. The Government, if it wishes to induce people to subscribe to Commonwealth loans, must encourage them’ by restoring their confidence.. Bat. while the Government, continues to discuss an increase of the. interest rate, it” will not persuade the average person to> withdraw morney from his. savings bank account, awd invest it- in a Commonwealth loan. The average worker is prepared to invest £100), £200, £300, oi 2400 in a Commonwealth. loan-, provided he issure that!, if sickness occurs- in his family a year or two- hence, or he requires money for a deposit on a- house, he will be able to sell his bonds at their facevalue. But what is the position to-day?’ Workers who have invested £4.00 or £500 in Commonwealth loans and desire to realize on them, receive only £86 or £87 for every £100’ bond. The Government is discussing the possibility of another increase of the interest rate on Commonwealth loans. All I can say is that the next loan is doomed1 to failure before it is launched’, because the average person desires to be certain that he will be able to sell a £100 bond for £100 in .a few years” time. He will notrun’ the risk of losing £13 or £14 on every £100 bond. There are extraordinarily large amounts of money in the various savings banks’ which could be transferred to Commonwealth loans, but I point out that some of my electors told me unequivocally during the notation of the last two Commonwealth loans that they would’ not invest their money in them while they incurred the risk of losing from £10 to £14 on every £100’ bond. Therefore’, the stabilization of interest rate is most desirable. Ministers claim- that the interest rate should be flexible, and that it is inevitable that interest rates shall be raised1 ; but if t’hey desire the success of Commonwealth- loans in the future, they must, whether they like it or not, support the stabilization of the interest rate.

The third consideration mentioned by the Treasurer was bank credit. The right honorable gentleman said -

We consider it justifiable, in the light of the change in- economic conditions as compared with a year a<ro- and the emergence of some signs of unemployment, that loan raisings for essential’ works of a truly developmental and productive kind should receive some special assistance from bank credit.

That observation is most interesting, because it demonstrates the truth of the maxim that the political heresy of yesterday is the accepted political’ ideologytoday., Years ago the Scullin Government required the miserable sum of £18,000,000 in the form of bank credit in order to provide work for the unemployed.. Anti-Labour supporters claimed that such a proposal, if it were adopted, would lead to national insolvency, and that the savings of the people would be dissipated. However, they now believe that the- injection of bank credit into the economy, at least in limited doses, is desirable.. It is gratifying’ to. know that we have- converted our political, opponents on that matter.

Government supporters, while agreeing to the issue of some bank credit, have stated in somewhat subdued tones thaisuch a measure should not be consideredthe general policy of the Government,, because it could give an impetus to inflation. The problems confronting this, country at the present time are inflation and unemployment. I was particularly interested in a statement by the honorable member for Ryan (Mr. Drury) this afternoon to the effect that unemployment was not a problem. I can only comment, that the honorable gentleman’s connexion with the people must be extremely distant, because members of. the Labour party know,, to their great sorrow,, that increasing numbers of electors are coming, to their homes to, tell them of their difficulties in finding employment. Whether or not we like to admit it, dismissals are becoming more numerous. I do not propose to participate in the argument about the accuracy of the various figures that have been cited regarding the number of unemployed, but I am inclined to accept- as being substantially correct the figure of 100,000 that has been given by the honorable member for East- Sydney (Mr. Ward). Even the Age newspaper, that sober and conservative journal which supports- the Government in- season and out of season, published the following leading article on the 11th August last, under the heading “ Unemployment a Challenge “ : -

If we had 13,480 drawing unemployment benefits last month,, is the Government willing to let the situation! develop till a great many more are receiving allowances inadequate to living needs, not to speak of the demoralizing effects of doles in place of wage-paid work?

If six months ago the trade unions reported 1.1 per cent, of their members’ unemployed, to-day’s figure would be higher. To let things slide may bring worse effects than an issue of credit.

The Age, which is a conservative organ, looks askance at any new proposals that emanate from the ranks of the Labour party. The newspaper contends that rather than allow unemployment to grow, there should be an issue of credit.

Everybody to-day feels a sense of anxiety. In directing the attention of the Government to the unsatisfactory state of affairs in industry, the Australian Labour party is not acting from motives of political aggrandisement. The Melbourne Age editorial continued -

The problem should be tackled now, not brushed aside as a figment of political opponents. Whatever the assertions of propaganda there is an element of truth which should act as a warning and spur.

Surely, honorable members opposite will not accuse the editors of that newspaper of being alarmists or of trying to make political capital of the fact of unemployment. The people to-day are in a state of complete bewilderment. They remember the Chifley Government era, when they enjoyed full employment, and when huge national undertakings were planned and were under way. From an era of nation building we have come to a period of chaos and uncertainty. Huge undertakings have closed down, and although wages have increased, prices have spiralled so greatly that the wage earner is worse off, and tremendous chaos has been caused by the imposition of credit restrictions. In industry, machines are idle. Farmers arc unable to obtain supplies and equipment. Potential home-owners and builders are unable to obtain vital finance. People, who are’ willing to work cannot find employment. This problem must be tackled now. It is of paramount import’ance that credit be freed, otherwise widespread economic uncertainty will occur.

The Minister for Commerce and Agriculture, during his speech to-night, expressed great concern because of the drift in our overseas balances. The honorable gentleman referred to import restrictions and in that connexion made a statement with which I am sure everybody will agree. He said that imports and exports must balance. In other words, exports must pay for imports. The Australian Labour party has never denied that that should do so. It is clear to all of us that some positive steps must be taken to expand food production. The Prime Minister and other members of the Government have been talking volubly about this vexed question for some time now. I was interested to hear the Prime Minister, when he addressed the House last evening, twit the Leader of the Opposition (Dr. Evatt) in regard to this matter. He said, in referring to the speech which the Leader of the Opposition made on Tuesday evening, that it is easy to make pretty speeches about increasing primary production. I suggest that if anybody has been making pretty speeches it is the Prime Minister himself. If speeches could solve problems, every problem in this country would have been solved two and a half years ago. Certainly, the right honorable gentleman has made enough speeches. The only catch is that positive action never follows his honeyed words. The people have awakened to a realization of that fact. “When the Prime Minister was in London recently he made a pretty speech about increasing primary production. He is reported to have said that a muchneeded increase of food production required substantial efforts in fields of transport, rural accommodation, water supply, fertilizer production, and the supply of farm implements. An examination of the present position of those matters shows an alarming drift, but the budget has revealed no provision to correct that drift. To-day, the important problem is the failure of primary production to keep pace with the demands of a rapidly expanding population. But what has this Government done to increase primary production, other than to make speeches about the subject? The Minister for Commerce and Agriculture referred to the fact that a five-year task has been set. More blue prints! What is the good of plans on paper? They do not put one additional farmer on to the land. Our exports have shown a marked decline during the last twelve months. For example, exports of butter have decreased by 87 per cent., mutton and veal by 38 per cent., and wheat by 6 per cent., despite the fact that the Minister for Commerce and Agriculture has spoken about wheat-farmers having set a production target based on a 40 per cent, increase. The quantity of good3 imported between 1939 and 1951 has increased by 100 per cent., whereas the quantity of goods exported during that time has increased by only 10 per cent., and is falling. We have been able to pay our way only because export prices have been higher than import prices. But export prices are falling. The Minister has attempted to take credit for the extraordinarily high prices now being paid for wool, although he must know that they were brought about by international circumstances entirely outside the control of the Australian ‘Government.

The reported statement of the Prime Minister that substantial efforts are needed to increase our water supplies makes ironical reading when one considers the fate of the Eildon Weir in Victoria, a project put forward by the Victorian Government for completion by 1955. If it could be completed it would double the irrigation acreage of the Goulburn Valley and boost the annual value of production in that part of Victoria to £2(5,000,000 a year. Because of the financial policy of the Australian ‘Government, that project is now at a standstill. Every State of the Commonwealth can point to examples of similar frustration and shrinking developmental plans as a result of this Government’s policy.

What is required is an increased number of primary producers, not plans and blue prints. The budget now before the Parliament will do nothing to provide that increase. When we have more primary producers, increased primary production will follow as a logical sequence. The success of war service land settlement has demonstrated that the number of settlers can be increased by a positive policy of government activity. The two basic resources are land and people, and they must be brought together. A major national effort must be made to put land settlement schemes into operation. Problems of land aggregations and an increasing tendency towards a form of absentee ownership must be faced up to. Since 1938-39 the number of people who own rural property has fallen by 2^ per cent., but at the same time the area devoted to rural production has nominally increased by 5 per cent In other words, a greater area of land is now owned and controlled by a smaller number of people.

In recent years our vast immigration programme has brought many people to this country. The Minister for Commerce and Agriculture stated that immigrants are being directed onto the land, but the fact is that only one immigrant in every ten is being directed to agricultural pursuits. The other nine go to the already overcrowded capital cities. When the immigration policy was first mapped out it was intended that primary industry would be the first to benefit. This Government, however, has done nothing to further that policy. The budget now before the Parliament should contain some plan relating to land settlement and increased primary- production. It should provide for young Australians to be given a chance to go on the land. A short while ago, tho Minister for Commerce and Agriculture tabled figures which show the ageing population on the land. The fact that our rural population is ageing is not to be wondered at, because no encouragement has been given to young Australiana to go on the land. No government scheme exists under which young Australians are given access to the land which is their natural birthright. Before the Government says anything more about incentives to primary producers, it should devise a plan which will give to young Australians, and also to immigrants, the opportunity to go on the land or to set themselves up in their own businesses. Until that is done, the Government’s policy in relation to increased production is doomed to failure. There must be compulsory land resumption, and land should be made available to settlers on the basis of much smaller holdings. I expect, when the Labour Government puts this proposal forward in 1954-

The DEPUTY CHAIRMAN (Mr. Bowden).- Order ! The honorable member’s time has expired.

Mr. SWARTZ (Darling Downs) [9.51J. - At the outset, I should like to make it clear that I fully support this budget and that I -appose the amendment which has been placed before the commiittee by the Leader of the Opposition (Dr. Evatt). .It is very obvious that the Leader of the Opposition and Opposition members generally are playing politics, as they have done when previous budgets have been presented in this chamber. I have reason to believe that the Opposition’s decision to move this amendment was made before honorable members opposite knew any details of the budget. Referring to the abolition of the land tas, the Leader of the Opposition said that this proposal would benefit only a few powerful vested interests in the burge cities. I suggest that the right honorable member should lift his thinking above the cities and try to remember that the Australian population consists of three (categories. There are the people in the capital cities, the people in the provincial cities and towns, .and those in the rural areas. If the right honorable gentleman considers only city interests, he will .not do full justice to the problem. However., the large “buildings to which ho has .referred as being owned by vested interests in the cities, in most cases house a considerable number of small business people and professional men, all of whom pay ments for .their offices. Any increase in the land tax would be passed onto them in the .form of increased rents. The land tax must also affect the cost of production in rural areas. If land tax is increased the cost of primary products must rise and the increased cost must be passed .on to the consumer. ‘Consequently, every one in Australia would be affected -by the increase or abolition of this tax. The abolition of the land tax may be regarded as a subsidy on living costs to the extent of approximately ae6,2’50;000.

The Leader of the Opposition also referred to the reduction in the works programmes of the .’States and attributed the blame for these reductions to the Australian Government. ‘[Quorumformed.] If it had not -been for the faction of the Australian Government in underwriting to ‘the extent of approximately £155,000,000, loans floated by the Australian Loan Council during the last financial year the entire State works programmes ifould have collapsed. I think that the Government’s action -is a matter for congratulation rather than condemnation by the States.

Honorable members have been entertained by the exposition of a rather novel economic philosophy by the Leader of the Opposition. He stated that the existing difficulties could be overcome solely by the issue of additional bank credit. It is strange to hear the opposition that has been offered to that proposal by his own supporters. The honorable member for Batman (Mr. Bird) alleged that inflation. was still rife. On the one hand the Leader of the Opposition has said that bank credit should he increased, while on the other hand his followers have contended that inflation is still rife - an other words that there is still too much credit. In dealing with the return of taxing power to the States, the Leader of the Opposition said that, if the Government .eliminated uniform .taxation, the people would have to pay higher direct taxation. If this is so, it is a reflection on the Labour party, as the Prime Minister ,(Mr.. Menzies) pointed -out, because the Labour .governments ‘‘O.f the States of New South Wales and Queensland have asked for the return of taxing -powers during the last, llew years and during .the last three months very detailed reference has been made to the subject by *he Premier .of Queensland. Although Labour .Premiers have asked for the return of these powers, the Leader of the Opposition has now stated that if they are returned to the States, .direct taxation will be increased.

The honorable member for Batman made some rather .unusual statements, which were not directly related to the budget proposals. He said that the budget would not -provide any .incentive for additional producers to settle on the land. The honorable member knows that land settlement ds a matter for ‘attention by the .State -governments. However, .theCommonwealth ‘.Go varum en.t has provided incentives for the primary industries .by giving relief from taxation and .by co-operating with the States through the Australian Agricultural Council. It has also ,-gi.ven assistance -in research wai 4he fostering <of- extension services. The effects of. the Australian Government’s encouragement of primary production will be seen in the next five years as the five-year programme,, which has. been agreed tO/bv the States and. the Australian Government., is fulfilled. The honorable member also referred to the press criticism of the effects of the 1951-52 budget, It was made clear when, that budget was introduced that certain measures that it proposed would not be popular. I do not think that were would have been any reason for withdrawing measures designed to inject stability into the economy solely on the ground of unpopularity. During the last financial year the governments of’ the United Kingdom, Canada, New Zealand and (ho United States of America have adopted financial measures which were very similar ii: design and pattern to those that were then adopted by the Australian Government. The honorable member alao said that housing had been affected by what he’ tailed the “ credit restriction policy “ introduced by the Government during the last financial year. He produced no facts or figures to substantiate his statement. The banking policy direction issued by the Central Bank to. the Con>monwealth Bank and trading banks stipulated that £3,0Q0 was to be the maximum that could be lent in respect pf a house without land and £3,500 in respect of a house with land. The maximum amounts were to be advanced a? a portion of the cost of houses which, together with the deposit would ultimately cost £4,000 or £5,000. If a policy, such as that is restricting the building of houses by the persons that the honorable member was referring to, then I should like to hear particulars pf .individual cases because obvioUsly people in the lower income brackets would npt normally build houses that would cost £4,000 pi- £5,000. He also repeated a statement that had been made by the Leader of the Opposition to the effect that the reduction pf direct income tax by 10 per .cent, would not, in fast, amount to any reduction at all. It would be interesting to read the textbook on logic upon which he based that statement, ‘ The Treasurer (Sir Arthur Fadden) said in his budget speech that the 10 per cent, reduction of direct income tax would be worth about £36,500,000 to taxpayers, in a full assessment, year and about £23,000,000 in the present financial, year. Those figures can be accepted a,s accurate by honorable members.

Reference has been made, to the. Jack, of public confidence in Commonwealth loans because of proposals to. increase interest rates and because of the fluctuation of interest rates. This matter has been before the Parliament time and time again, and statements in regard to it have been refuted time and time again. The Australian Government is not responsible for the loan market nor for the interest rates associated with. it. Those matters are the direct responsibility of the Australian Loan Council, on which the States have six votes and the Commonwealth has two votes and u casting vote. Honorable members opposite have mentioned import restrictions and the necessity to increase primary production in order to balance our present trading position. The honorable member for Batman asked v, hat had been done to increase primary production in Australia, and I shall deal with that query later. I direct the honorable member’s attention to the fact that in June there was a surplus of exports over imports of £1,100,000, and in’ July one of £8,200,000. That is quite a distinct improvement on the unfavorable trade balance of from £70,000,000 in one month to approximately £24,000,000 in May. The wisdom of the import restrictions is amply demonstrated by the trading figures. The trade balance is now showing a distinct upward trend.

The honorable member for Banks (Mr, Costa) cited figures for unemployment, and made a lot of play about that subject. The honorable member for Batman and several other honorable members did much the .same thing. The figures that they have cited were provided by .a rather doubtful economist, the ‘ honorable member for East Sydney (Mr. Ward). I desire to quote from that reliable daily -newspaper, The Canberra Times, of the 13th August. An article published in that newspaper stated that the number qf unemployed in Australia on the 25th July of -this year waa 13,480, and that unfilled jobs had declined by 5,586 for men and 591 for women as at the same date. It stated further that vacancies registered at the 25th July were distributed among the major industrial groups as follows: - ,

I repeat that those figures represent the registered vacancies for positions at the 25th J uly of this year. The Canberra Times commented -

Existing unemployment was mostly confined to unskilled workers, although most of those receiving unemployment benefit were classed as older workers, physically disabled persons and those with bad employment records. Recipients of benefit also included some younger workers, but their duration nf unemployment was not known.

It is interesting to note a further paragraph that appeared in the same article - increases in employment recorded during July were mainly in the basic iron and steel industries, shipbuilding, aircraft and defence production.

During the course of this .debate, much ground has been covered by honorable members, and honorable members have wandered far from the basic proposals of the budget. I intend to refer to some of those proposals which will have considerable effect in the present financial year. The most important item, and one that has been much discussed during the debate, is the payment to the States. During the present financial year the amount paid to the States will be £177,800,000 compared with £160,900,000 in the last financial year. This year’s reimbursement will be almost three times as much as that made to the States during the last year of office of the previous . Labour Government. It is interesting to note that the formula that the Conference of Commonwealth and State Ministers worked on would, if followed, allow only £108,800,000 to the States during this financial year. This Government is making to the States this year a special financial assistance grant of £27,100,000.

The system of special grants was introduced by this Government during the last few years and was not in existence during the period of office of any previous government. In order to supplement the return from the loan market, the Government has decided to give further financial assistance to the States quite apart from what they would have been allotted had the normal formula been applied.

Another important matter dealt with in the budget is the allocation of £200,000,000 for defence compared with the £169,500,000 allocated in the previous year. “We have not heard much discussion about this matter by honorable members opposite, but we should all agree that a great and desperate responsibility lies on Australians to ensure that we shall take our place alongside the other members of the British Commonwealth and the other nations of the western world in putting our defences in order. It would be interesting to know whether speeches that have been made by Dr. J ohn Burton during recent months are in conformity with the foreign policy of the Labour party. Dr. Burton has consistently advocated disarmament and a direct association between Australia and certain Eastern countries. I merely say to him, and to certain members of the Opposition, that, if the Communists are convinced that disarmament is the proper course to pursue, they can easily set an example to the world by terminating their extremely large military expansion programme and disarming at once. Perhaps the honorable member for East Sydney will advise his friends in Peking to do so.

The immigration programme for this year has been curtailed. The Government’s decision to reduce the programme has been accorded an unusual reception by certain members of the Opposition. The honorable member for East Sydney said that immigration should cease altogether. Another member of the Opposition, however. contended that immigration should be accelerated. The honorable member for Melbourne (Mr. Calwell), who formerly was Minister for Immigration, has remained strangely silent on this subject. The Government took the only common-sense course of action in the light of present circumstances. Australia has been increasing its population in recent years at a rate of about 4 per cent, per annum, a rate that was never achieved at any stage in the history of the United States of America. Fortunately, until this year, we have been able to incorporate the newcomers in our economy. However, under existing conditions, the curtailment of the programme to 80,000 persons is sensible and logical. The budget envisages a reduction of expenditure on capital works and services in 1952-53 by £4,000,000. That is in accordance with the Government’s promise to reduce governmental expenditure. Subsidies will be maintained at the high level of £28,400,000, and this will have a beneficial effect in the underwriting of our living costs.

The record of the Government in the field of social services is one of outstanding merit. Honorable members should recall that the initial pensions scheme in the Commonwealth sphere was established by a government of the same complexion as the present Government. In 1949, the Chifley Labour Government refused to increase pensions rates and child endowment. This Government last year increased pensions rates by 10s. a week and instituted child endowment for the first child in each family at the rate of 5s. a week. Pensions rates will be substantially increased again this year. The addition of 7s. 6d. a week will increase to £6 15s. the amount of pension that a married couple may receive. Under the means test, of course, they will be permitted to earn extra income. The means test was generously relaxed last year in relation to insurance. The Government has also introduced worthwhile health and medical benefits for pensioners, who now are able to obtain free medicines and medical treatment. Tax concessions have been provided for aged persons. Every honest individual must agree that the Government has achieved remarkably good results in the field of social services during the short period for which it has held office. Furthermore, the Minister for Health (Sir Earle Page) has informed us that additional health benefits will be made available during the current financial year.

The financial provision for repatriation benefits will be increased by £3,200,000 this year. The 10 per cent, levy on income tax will be discontinued. Reductions and adjustments of company taxation on both public and private companies will give a definite incentive to private enterprise. Special tax deductions in respect of education expenses will assist thousands of families throughout Australia. The sales tax reductions, which have become effective already, produced an immediate response. In fact, that response became evident on the day after the Treasurer made his budget speech. Department stores in Sydney advertised price reductions resulting from the lowering of sales tax rates. One company advertised a £10,000 reduction of prices on its stocks and another published a list of reduced prices for a wide variety of goods. I have already mentioned the importance of the abolition of land tax. It will have the effect of subsidizing our living costs by an amount of £6,250,000.

This is a budget for everybody. It will help families by reducing income tax and sales tax and by allowing concessions to schools and parents in respect of certain education costs. It will help to boost rural production. The special 20 per cent, depreciation allowance in respect of plant, machinery, equipment and buildings for primary production will have a valuable effect upon the entire national economy. Income tax and sales tax reductions and the discontinuance of land tax will have a powerful stimulating influence on primary production. The recently introduced self-assessment procedure for the payment of provisional tax has had a similar effect. The budget includes provision for the expenditure of £1,200,000 on special extension services that will be vital to the programme for the increase of primary production. Higher production targets were reached after consultation between representatives of this Government and the State governments, and plans to reach those targets have already been drafted. Dollar allocations have been made from Australia’s normal dollar budget and from dollar loan funds in order to ensure that essential machinery and plant that can be obtained only from dollar sources shall be imported. The admission free of duty of a large range of items of capital equipment and plant has been of great direct assistance to primary producers and will help to increase production during the next few years. That is a part of the general programme that has been laid down by the Australian Agricultural Council.

Certain provisions associated with the budget will have a beneficial effect on the State of Queensland in particular. The Government recently decided to assist the Australian tobacco industry, which is located mainly in Queensland, by increasing by 100 per cent, the proportion of Australian leaf that must be blended with imported leaf in order to qualify imported leaf for customs tariff concessions. This will l)e of great benefit to the industry. The Minister for Trade and Customs (Senator O’Sullivan) announced to-night that the Government would give valuable assistance to the cotton industry, which is confined principally to Queensland. Tin.’ Government previously introduced a five-year guarantee plan for cotton on the basis of a minimum price of 94d. per lb. lor seed cotton. The Minister for Trade and Customs announced this evening that the guarantee would be increased to 14d. per lb., which will give a. desirable incentive to the industry. I have received from the Cotton Board in Queensland the following telegram on the subject: - Very satisfactory decision and believe will be great contribution to expansion and stabilization of industry.

The Government has ear-marked an amount of approximately £1,000,000 to be expended on the construction of roads and the maintenance of stock routes in the Channel country area of western Queensland. This expenditure will greatly assist the cattle industry not only in western Queensland but also in nearby areas of the Northern Territory. Last year, the Commonwealth aid roads grant was increased by approximately £3.000,000 for the State of Queensland, uki the total amount was more than double the amount that had been paid in any one year by the previous Government.

The DEPUTY CHAIRMAN (Mr. Bowden). - Order! The honorable member’s time has expired.

Mr TOM BURKE:
Perth

.- The honorable, pleasant and kindly mem ber for Darling Downs (Mr. Swartz) has convinced himself, if no one else, that this Government has produced a wonderful budget. Perhaps it is cruel to disillusion him, but the fact has emerged that the budget, which was produced in an atmosphere of such excited expectation, has succeeded in satisfying just no one at all. It is evident that the Government has made no attempt to solve the many grave problems with which the nation is faced- It has done nothing to satisfy the clamant demand of the people for a direct and positive economic policy, ft has done nothing to mitigate the evil of inflation, and nothing to correct the paradoxical situation in which, while unemployment is growing rapidly, the cost of living continues to rise, as has been demonstrated by the most recent increase of the basic wage by 12s. a week. Such a situation is unique in the history of industrialized countries. The budget, which the honorable member for Darling Downs lauds so generously, does not pretend to meet that situation.

The honorable member said that the criticism of the Opposition could be disregarded because it had prepared its censure motion before the budget was brought down. That is not true, and as most of his arguments were based on that assumption, those arguments necessarily fall to the ground. The decision to launch the censure motion was made after the budget was introduced, but there were ample grounds for censure even apart from the budget.

The honorable member for Darling Downs said that this Government had made some magnanimous gestures to the State governments. It had, he said, underwritten the State loan raising programmes, a matter about which I shall have a good deal to say later. It is sufficient now for me to point out that the State governments have received nothing from the Commonwealth to make any particular demand upon their gratitude. The Commonwealth took from the States their normal revenue raising powers, and has given back to them with a grudging hand less than they require, less than they are entitled to and less than the loan market, if untampered with, would have yielded to them.

Discussing the unemployment situation, the honorable member said that there were in Sydney a large number of registered vacancies for workers, and he implied that the same situation existed elsewhere. If the situation in Sydney is the same as in Perth, I invite the honorable member to try his hand at finding jobs for unemployed persons. Recently, I had occasion to try to obtain a position for a man who came to me foi’ help. He only wanted a job as a farm labourer in one of the pastoral or agricultural districts of Western Australia. 1 said that it should be easy to place him, but when I went to the officer in charge of the rural section of the Commonwealth Employment Office, I was told that there was not a job in the whole of Western Australia, that great; land mass which represents one-third of the area of Australia, to which a young, healthy adult male could be directed. There were, he said, a few vacancies for primers in orchards or for junior farm workers, but none for adult farm labourers. The fact is that, whether for trained or untrained workers, very little employment is offering at the present time, although there is almost unlimited work to be done if the money were available. I thought we had heard the last of the story that men who are willing to work could not be employed for want of money. The Prime Minister (Mr. Menzies) referred with apparent feeling to the bitter depression years when men and materials were available, but work could not be provided because there was not enough money. I remind the right honorable gentleman that the same conditions are beginning to emerge again, even in the rural industries, where only labour is needed to increase production.

The honorable member for Darling Downs claimed that the formula worked out by the Chifley Government to reimburse the States for the loss of their income tax revenue had not proved sufficient to meet their needs, and he said that the present Government had, to use his own words, “ generously increased “ the amount which the formula would have provided. That, of course, is a manifestation of the inflationary condition which this Government so resolutely refuses to face. While costs are mount ing daily - indeed, almost hourly - no formula can meet the need of the States for revenue. Unless the Commonwealth takes positive steps to deal with the situation it will have to go on year after year increasing its grants to the States. That, if nothing else, should compel the Government to face its responsibility.

The honorable member for Darling Downs then dwelt proudly on the Government’s record in the matter of social services. He said that the Government proposed to increase age and invalid pensions by 7s. 6d. a week, and pointed out that it would be possible, on the new rate, for a man and his wife to receive £8 15s. a week. That illustrates graphically how the economy of the country has been damaged during the regime of the present Government. The amount of £6 15s. which may be paid to a pensioner and his wife to-day is far more than the basic wage was when the Government assumed office. Nevertheless, it represents a smaller percentage of the basic wage than was represented by the age pension at any other time since tinpensions scheme was inaugurated. And the end of the story is not yet. Unless the Government grapples with the problem in a determined effort to solve it, there will be more and more increases, until some fantastic figure has to be paid to pensioners, a figure which will still be inadequate to meet their urgent needs.

The honorable member referred in eulogistic terms to the easing of the means test. He pointed out that pensioners were now permitted to have an insurance policy the surrender value of which was. £500. But how many pensioners will the easing of the means test assist? WhaT benefit will it bring? The honorable member for Eden-Monaro (Mr. Allan Eraser) has pointed out that the most essential need is to increase the earning power that is allowed to the pensioners. The permissible earnings of 30s. a week meant something to the pensioners when they were provided for by the Chifley Government. To-day that sum means nothing in terms of purchasing power. If this Government had been conscious of its responsibilities, it would have provided for a substantial increase of the earnings that are permitted to pensioners.

The Treasurer (Sir Arthur Fadden) brought down his budget in an atmosphere of expectancy. For several years the people of Australia, confused and perplexed, had watched the constant contradictions of policy of the Government. Most of those who had studied the record of politics in Australia were not astonished by the actions of the Government. The parties of which it is composed had been tried before and had failed, and students of the course of Australian political history expected further failure. Nobody could have anticipated, however, that in such a short time, a government could convert a prosperous scene into such a muddle as that which presents itself to-day. The people of Australia awaited the budget in the hope that the Government could produce some solution of the national problems. The circumstances of to-day are almost unique. We have rapidly developing unemployment combined with a sharply rising basic cost of living. The people of Australia expected, as they had a right to expect, that the Government would make some attempt to tackle the problems confronting it. Instead, the Treasurer, after pointing out that record prosperity had almost ruined us, said there were dangers in the situation of recession and inflation. “ But “ he said in effect, “ if you fear any of those evils, the menace of prosperity has gone. No longer need we fear that we shall be ruined by prosperity. But if you fear inflation and if you are fearful of a deepened depression with rapidly mounting unemployment, study, the face of our community “. That is what we have to do in the words of the responsible Treasurer. If honorable members follow that advice, they will find that the situation is more confused than it has ever been because of the vacillations of this Government. It has lacked policy and direction in the measures that it has introduced, repealed and brought down once again. Every phase of Australian economic life is confused. The business community is perplexed and wondering. It does not know how it can advance its business, expand trade, or develop connexions. It does not know what the Government intends to do. Agricultural production is dropping rapidly. Only last week Sir John

Teasdale, chairman of the Australian Wheat Board, said in a public speech that flour millers would not be able to keep their mills operating profitably because of insufficient wheat production. Throughout Australia unemployment is growing. The housing situation has shown no improvement. Long list3 of married men, some newly married and many others with family responsibilities, are waiting for houses in which they can live comfortably. At the same time filtrate of house construction is falling rapidly. The Labour Government tried to expand agricultural production. To-day war service land settlement schemes are being reduced by this Government and some have been discontinued entirely.

Throughout the Australian economy the story is the same. A clear policy is not being applied in any corner of the Australian scene. Not one section of the people can plan with security, work with certainty, or prepare for the future. All this is not due to lack of desire on the part of the people. They are eager to go ahead. Thousands of young men are determined to get their livelihood from the land if only they can get the opportunity to do so. Countless thousands of Australian people are looking for homes. Business people who have been established for years are anxious to expand production. What is stopping them? Nothing but the Australian Government in Canberra, which is holding back the country by its mismanagement, by contradictions of its economic policy and by general lack of wisdom. The Government claims that certain concessions in this budget will stimulate production, develop business enterprise and generally bring the nation back to a state of high prosperity. As usual the Government has repealed some of the things that it did last year when the budget was presented. In one year, it will abolish taxation concessions that it has given. In the next year it will lamely reintroduce the concessions in part. It will impose a new tax in 0np year and in the next year will take it off. That has been the pattern of government action. It speaks of positive action and then capitulates to some pressure group, retreats from its responsibilities or abandons them. There is nothing clear cut that can make any appeal to the Australian people or encourage them to do the work that they are given to do. The honorable member for Darling Downs said that the Government had underwritten the loans of the State governments last year. He regarded that action as a most magnanimous contribution by the Commonwealth to the needs of the States. The simple fact is that it, by - the most crude handling of the finances of Australia, it has completely demoralized the loan market, and inflicted grave injustice on countless thousands of citizens who had trusted it but who, to their regret, have lost a large proportion of their savings, which they hod accumulated by long and constant effort. The policies that the Government is applying threaten to inflict even greater losses on the people. The Government betrayed the trust of those who placed their faith in the sanctity of its word

Mr Kekwick:

– The honorable member does not believe that to be true.

Mr TOM BURKE:

– I do, and I -ball prove it to be true in a moment, if the honorable member will pay to me the compliment of listening to my remarks. This Government has denied to the State governments the money that they require to carry out their public works programmes, for which labour and materials are either available locally or may be imported. As on previous occasions, the Government has applied a contradictory policy that has confused the people. First, it said that capital issues control had been abolished, and that it would do everything in its power to encourage production. The people accepted its word, and commenced new businesses. Many persons established themselves in businesses which they thought would provide life-long security for them. But, out of the blue, the Government announced that capital issues control would be reinstituted, and it superimposed upon that form of control a vicious system of credit restrictions. Capital issues control may be necessary in order to prevent the establishment or expansion of undesirable industries, but credit restrictions have caused many people to lose the whole of their savings. A similar policy wa3 followed in respect of imports. The Government announced that it favoured the stimulation of imports in order to maintain our standards of living. The people of Great Britain were encouraged to gear their industries to the production of goods to meet the requirements of the Australian trade, and Australians were encouraged . to import commodities freely. Anybody could have told the Government that the flood of imports into Australia threatened our overseas balances. Then, suddenly, the Government imposed import restrictions, causing British exporters and Australian consumers to suffer immense losses, and endangering our economy. Policies of that kind have caused the confusion that exists in the Australian community to-day, and have brought in their train resentment against this Government. People no longer know where they are heading.

The Government has also ruined the Australian bond market. Large loans were floated by the preceding Labour Government, and each of them was oversubscribed. On Monday the 21st May, 1951, the Treasurer, when opening the £40,000,000 loan, said-

The record of Commonwealth loans was remarkable. It illustrated that in war or peace the public freely subscribed to government calls for money and was mindful of its national duties.

Having made that statement, and having directed attention to the fact that earlier loans had been freely subscribed, the right honorable gentleman announced, with startling suddenness, that the new loan would be issued at a discount of 1 per cent., thus giving the clearest indication that interest rates were to be increased. The loan market immediately deteriorated. Commenting on this matter on the 3rd August, 1951, the financial editor of the West Australian said -

Bondholders in the last two months have been somewhat bewildered at the drift in the market which has allowed yields to settle somewhere around 3$ per cent, without official intervention.

I invite honorable members to note the pin ase “ somewhere around 3-J per cent, without official intervention”. The agencies of the Commonwealth - the National Debt Sinking Fund and the Commonwealth Bank - should immediately have been instructed to buy bonds in order to bolster confidence in the Commonwealth loan market. During the following week the same journal published a message from Canberra bearing the date line the 12th August, which read as follows : -

The Commonwealth is expected to seek Loan Council approval to raise the present interest rate. The Common wealth, believes that this will draw back to Government Bonds investment money now attracted by the higher yields of industrial shares.

The suggestion is likely to meet strong opposition from the States.

The journal stated that the proposal had been strongly opposed by New South Wales and Victoria, but that its acceptance had been forced upon the States by the Commonwealth which exercised tremendous blackmailing powers in its financial relations with the States. Finally, on the 17th August, 1951, the new interest rate was fixed at33/4 per cent. No official announcement of the new rate was made and Treasury officials attempted to keep secret the discussions in the Australian Loan Council. Thus, there is the clearest evidence that the Government, on two successive occasions, forced an increase of the interest rate. In these circumstances who would invest in loans at 31/8 per cent. when a rate of 33/4 per cent. was available?

Last night the Prime Minister dealt with the speech on the budget made by the Leader of the Opposition (Dr. Evatt). He said that the Leader of the Opposition had claimed that the loan market could be stabilized and interest rates fixed at 33/4 per cent. He described that proposal as fantastic, and invited the committee to examine the results of loan floatations in Victoria and Tasmania. As clearly as words can express an intention, the Prime Minister has shown that a further increase of interest rates is contemplated and, as a consequence, Commonwealth bonds will deteriorate further. It is absolutely essential that the confidence of the investing public shall be restored. It is true that there are dangers inherent in financing the needs of governments by the issue of treasury-bills. However, the defects of that system may be overlooked at a time when there is unemployment in the community, because of the two evils unemployment is the greater.From both the human and production, standpoints unemployment is disastrous. When unemployment exists in the community money must be made available even if it be necessary to resort to the issue of treasury- bills; but tight controls are necessary in order to counter the effect of such an inflationary measure, The only suitable way to dispel the existing confusion on the bond market is to return to a bond rate of 31/8 per cent. If that were done, the yield from earlier loans would approximate the yield from new loans issued by the Government. By that means the confidence of the investing public would be restored.

Mr Freeth:

– Does the honorable member believe that investors would lend money to the Government in those circumstances ?

Mr TOM BURKE:

– The honorable member for Forrest (Mr. Freeth) does not appear to understand that the interest rate on Commonwealth bonds establishes the yield from other securities. The Government has now deliberately narrowed the margin between the rate of interest on Commonwealth bonds and that applicable to savings bank deposits.

Mr.KEKWICK. - The Government does not fix the rate of interest.

Mr TOM BURKE:

– The Government must accept that responsibility because it is empowered to direct the Commonwealth Bank in that matter.

The DEPUTY CHAIRMAN (Mr. Bowden). - Order! The honorable member’s time has expired.

Progress reported.

page 372

ADJOURNMENT

Puckapunyal Camp - Rail Transport -

Flood Damage and Relief- National Service- Broadcasting

Motion (by Mr. McBride) proposed -

That the House do now adjourn.

Mr POLLARD:
Lalor

.- Last evening, I sought to bring to the notice of the Government a difficulty that has arisen in respect of the Puckapunyal training camp. Since the early stages of World War II., the defence authorities have owned and controlled an area of approximately 50,000 acres in that district in which a very ‘ large military encampment has been established at which national services trainees undergo training. During the recent war, the present area controlled by those authorities was found to be adequate to meet their requirements. At that time, large numbers of men passed through that camp. It now appears that some bright individual has discovered that the area is insufficient to meet present defence requirements. I am not an expert in such matters, but it appears to me that the proposal of the defence authorities to acquire farm lands adjacent to the camp should be thoroughly investigated. It is true that the acquisition of land on the eastern side of the camp would give easier access to local head-quarters by obviating the necessity to march troops a few hundred yards in a westerly direction, where a vast area is available for training purposes. Four months ago, I wrote to the Minister for the Army (Mr. Francis) and, in courteous terms, pointed out that notices of acquisition were about to be served on the farmers concerned, most of whom were born in that district. I asked the Minister to investigate this matter and, if possible, to cancel the notices of acquisition. The owners of these farms are very distressed. They are quite willing to give way to the defence authorities if it is demonstrated that the acquisition of their farms is essential to meet present defence requirements. I doubt whether such action can be justified. The Minister has not yet acknowledged my letter. I suggested to him that he should visit the camp and ascertain at first hand whether the land proposed to be acquired is really required for defence purposes. I ask the Minister for Defence (Mr. McBride) to convey my representations to his colleague. I emphasize that an urgent investigation should be made of this matter. I cannot conceive that, in existing circumstances, the Army authorities, which already own and control about 50,000 acres in this area, should find it necessary to acquire these farms. That might be a convenient course for the defence authorities to take, but it would be to the detriment of primary production and would also do an injustice to these farmers who have lived in the area all their lives. I believe that if the Minister for the Army visited the area and investigated this matter he would be convinced that such acquisition was not necessary. I am astonished that he has not acknowledged my letter, although I admit that he may not Ye have received it. On a previous occasion I wrote to him with respect to the issuance of an order by the defence authorities to permit troops to tramp over this area and ‘to occupy it temporarily in the course of training and he replied that he would investigate that matter.

The second matter to which I wish to refer relates to notices of acquisition of an area .of 9% acres in the City of Melbourne which the Government intends to resume with the object of providing additional office accommodation. I am informed that, pending actual acquisition, the owners of the properties concerned are not allowed to collect rents from their tenants, but that the Government is collecting them. Such a position appears to me to be fantastic. I ask the Minister for Defence to ascertain the facts from the Minister for the Interior (Mr. Kent Hughes). I should like to know why, pending acquisition, the owners of these properties are not allowed to collect rents from their tenants.

Mr JAMES:
Hunter

.- Today, I received from the Mayor of Cessnock the following urgent telegram : -

Twice in seven days Richmond Vale only line available coal traffic between Cessnock Newcastle. Only capable carrying 50 per cent, of gas coal produced. Request matter bc again raised as matter of national emergency. - -OLDFIELD, Mayor of Cessnock.

Over a period of many years I hove directed attention to the all too frequent flooding of the Hunter River and have repeatedly made representations to the Government to provide relief to sufferers from floods in the Maitland area. On such occasions, I have also advocated the construction of an all-weather railway from Minimbah through Cessnock to Morisset. I urged the Government, if it did not feel disposed to finance the construction of that railway, at least to finance as an emergency measure the construction of a railway from Minmi 10 Richmond Vale, a distance -of from l -£ to 2 miles. The latter would provide an all-weather link with Richmond Vale to West Wallsend, connecting Cessnock and Cockle Creek. Just prior to the election of this Government, the Joint Coal Board was prepared to finance the construction of that link, hut owing to the policy of this Government the board has not been able to do so. The Joint Coal Board is charged with the responsibility to endeavour to mainfain the production of coal, and it is empowered to acquire any property necessary to attain that objective. A private railway, known as the J. and A. Brown Railway, could link West Wallsend and Cockle Creek. During two previous floods in this district coal supplies were interrupted. If there was a shortage of coal at present, due to industrial trouble on the coal-fields, this House would be in an uproar and the newspapers would blazon head-lines such as “ Coal-miners on strike again “. At present the main northern railway line at Maitland is flooded, as well as the South Maitland railway line that I have mentioned. When I raised this matter in the House last week, the Prime Minister (Mr. Menzies) stated that he would look into it. Now Maitland is flooded again. That unfortunate town has experienced two floods within seven days, and the present flood has not yet reached its peak. Who floods occur at Maitland and Hexham, the transportation by rail of primary produce to Newcastle, for shipment overseas and to other States, is interrupted. No alternative means of transportation is available to shift coal from the Greta - Branxton-Muswellbrook area.

Honorable members will remember that some time ago I advocated that a lease of coal-bearing land in the Singleton area should be granted to an American company. The Uta Coal Company has since obtained a lease there. This company has devised a means of preventing the spontaneous combustion of coal, which in the past has caused many fires in the Greta seam. The company is prepared to carry out work necessary to prevent the Hunter River from overflowing its banks in future and causing widespread damage. However, I consider that the necessary work should be undertaken by the Commonwealth in conjunction with the New South Wales Government. The company is prepared to finance the construction of a straight canal to take the place of the present winding course of the river.

When I visited Holland some time ago I was very impressed with that country’s waterways. Canals are used extensively. Iii fact, excluding our main highways, I think that the mileage of the canals in Holland exceeds the mileage of roadways in this country. As the American company to which I have referred is prepared to invest £10,000,000 in the development of its lease, I consider that this National Parliament, as a matter of urgency, should take steps to obviate the further flooding of the Maitland area. It should co-operate with the New South Wales Government in the construction of a straight canal at Maitland, in order to ensure that all the coal won on the coalfields there shall be marketed readily. I have been advocating the construction of such a canal at Maitland for about twenty years, and I was very pleased to hear the honorable member for Paterson (Mr. Fairhall) support my plea in this House recently. I urge the Government to take immediate steps to overcome the present tragic state of affairs at Maitland.

Mr WARD:
East Sydney

.- I desire to raise a matter concerning the deferment of national service training for young Australians. I am aware that the National Service Act provides that an application for deferment of call-up, on the ground of hardship, can be made to a court of summary jurisdiction. Evidently, however, magistrates are of the opinion that only power to defer on the ground of financial hardship is intended. As a result, I contend that a case that I recently brought to the notice of the Minister acting for the Minister for Labour and National Service (Mr. McBride) wa.i not dealt with on its merits. I have made a request to the Minister for the decision of the court to be reconsidered, because I understand that no provision is made for appeal from a decision of a magistrate. The Minister should examine the provisions of the act to ascertain whether, in cases where it appears that an injustice has been done to an applicant, he has power to reverse a magistrate’s decision. If such power is not vested in the Minister, I consider that the act should he amended to provide for appeal from a magistrate’s decision or for an overriding authority by the Minister to deal with certain cases.

I have in mind the case of a young man, whose name I do not wish to mention, who applied for deferment of call-up for national service training on the ground of hardship other than financial hardship. His reason was that real hardship would be inflicted upon an aged relative with whom he lives. The young man is an employee of the Postal Department. I have received a reply from the Minister in which he states that the circumstances that I have mentioned were considered by the court. I do not know whether the Minister has merely accepted the decision of the court or whether, following my representations, he has read a transcript of the evidence, because that is not the position at all. I do not know whether an applicant for deferment is entitled to assistance in securing legal representation, or whether, if he is unable to afford the services of counsel, he has to present his case in his own way. In this instance there was no legal representation. I understand that when the lad attempted to inform the court that he lived with his aged grandmother, who would suffer extreme hardship unless his call-up was deferred, he was not afforded an opportunity to state his case fully, and his application was considered only from the standpoint of financial hardship. The young man is a telegraph messenger who had injured his arm in a fall from his bicycle. As a result, he was unable to wear his tunic when he appeared before the court. Before his application was even considered the magistrate berated him for appearing in court without wearing his departmental tunic. Indeed, I am informed that the application was dismissed without any consideration at all being given to the facts. I submit that that is a quite improper approach to make in such a case.

The young man lives in a cottage with his aged grandmother, who is an invalid pensioner. No other person lives in the cottage. The old lady is suffering from a heart ailment and a number of other ailments, and she has a doctor’s certificate to the effect that she should not be left alone. She is unable to do her own messages or even to perform, her own domestic duties, but has to be assisted by her grandson. She reared the lad and she is now greatly distressed that she is going to be left alone, particularly in view of the medical opinion that she should not be left alone. When the magistrate gave his decision, he stated that the grandmother and the lad would be better off financially if the lad did his training then than they would be if his training were deferred. But the application was based, not upon that ground, but upon the ground that the grandmother should not be left alone. The lad is to be commended for the assistance that he gives to his grand parent by doing her domestic duties and generally caring for her after he has completed his day’s work.

Provision should be made for appeals from decisions of magistrates in cases of this kind, or for the decisions to be reconsidered in some way. I believe that, in this case, the training of the lad should be deferred until his circumstances have changed. In my opinion, while the circumstances remain as they are, the Government is not justified in asking him to enter a military camp for training.

Mr FRANCIS:
Minister for the Army · Moreton · LP

– The Australian Army is confronted with the difficult problem of finding adequate areas for training purposes and adequate accommodation for its married personnel. The size of the Permanent Army and of the Commonwealth Military Forces is increasing constantly, and the number of national service trainees is growing substantially. In many camps we are building small villages for the accommodation of married personnel. These villages have given rise to additional problems, because we are required, in co-operation with the States, to provide schools and other amenities. In Puckapunyal, we have given to the Victorian Government 5 acres of land on which to build a school for the children, and we are willing to provide other assistance. Shops also are required in the villages. In addition, we need larger training areas. All of those matters are receiving the careful attention of the military authorities and myself. The problem is not confined, as the honorable member for Lalor (Mr. Pollard) has implied, to Puckapunyal camp in Victoria. A similar problem exists at Ingleburn, in -Vew South Wales, Wacol in Queensland, and Woodside in South Australia. The problem is not quite so acute in Western Australia and Tasmania. During World War II., we had a great concentration of forces in Western Australia. Therefore, we have, pro rata, more military buildings there than in the other States.

In all the States, we are faced with the problem of obtaining larger areas of land for the purposes of training an everexpanding army. I assure the honorable member for Lalor that, at the present time, it is not intended to proceed with acquisitions of property. But we must proceed with the training of Army personnel. Every possible consideration will be given to the owners of properties on which training will be carried out. Before the training operations begin, we shall issue a proclamation and an officer will visit every person in the area covered by the proclamation to inform them of the days on which training operations will be conducted. If the trainees, in their enthusiasm, break a fence or cause any other damage to property, we shall pay adequate compensation readily and shall not quibble about the matter.

I regret that the honorable gentleman’s invitation to me to receive a deputation has not been brought to my notice.

Mr Pollard:

– It is an invitation to visit a property.

Mr FRANCIS:

– And to meet a deputation. As soon as this policy has been adopted universally in Australia, I shall be delighted to accept the invitation.

Mr ANTHONY:
PostmasterGeneral and Minister for Civil Aviation · Richmond · CP

– My attention has been directed to some remarks that were made last night by the honorable member for East Sydney (Mr. Ward), when I was not present in the chamber, about the remission of land-line charges to country radio stations. 1 am sure that the honorable gentleman did not wish to misrepresent the position, and that he will be’ glad, to be informed of the circumstances under which those charges are remitted. All country radio stations pay at trunk-line rates for news services transmitted to them by land-lines. The farther away a station is from the capital city which is the source of its news services, the heavier is the impact upon it of charges for the transmission of the services to it. In some instances, the charges amounted to £2,000 a year, but some radio stations were not earning that sum in a year. Many country radio stations were compelled to reduce their news services because they could not afford to pay the land-line charges.

During the war years, Labour governments provided all radio stations in. Australia with free news services on the condition that they used, I think, the Australian Broadcasting Commission service. When the war ended, conditions were restored more or less to normal by the Government, although some charges for which radio stations were liable were not imposed. That was the position when I became Postmaster-General. In order to ensure that country people shall be provided with news services, I have informed radio stations that, for the transmission of news services by land-line, a fiat rate of £50 a year will be charged, irrespective of the distance from thecapital city from which they obtain such services. The transmission charges previously in force did not impose a burden, upon radio stations in the capital cities, but they imposed a real burden upon stations such as those at Longreach, Deniliquin and Dubbo, which had to pay heavy trunk-line charges upon the news services that they broadcast for a quarter of an hour three or four times a day.

No concession has been made to wealthy vested interests. The concession has been made to serve the interests of country people generally, and to ensure that they shall have available news services comparable with those transmitted by metropolitan stations. The result of the Government’s action is that some radio stations have extended their news services. All stations are free to obtain their services from any source.

Mr McBRIDE:
Minister for Defence · Wakefield · LP

– in reply - The honorable member for Hunter (Mr. James) appealed to this Government to grant some assistance in respect of railways and waterways in the area that he represents in this Parliament. I was interested to hear that he had been making similar appeals for approximately twenty years. The Labour party was in power for eight years of that time, but apparently his appeals fell upon deaf ears then. These matters come within the jurisdiction of the State governments. If the States believe such works to be necessary, they are competent to undertake them. If they require assistance, they should make representations to this Government.

The honorable member for East Sydney (Mr. Ward) referred to national service trainees. It is true that before a lad is called up for training, he has to have a medical examination, and has to be certified as fit for the training that he is about to undergo. It is also true that, under the act, total exemption cannot be given to any person who is eligible for training. Consequently, all that can be done is to defer the training period until a time that is more suitable to the trainee or to his employer.

Mr Ward:

– Is there any limit to the number of deferments that a trainee can secure ?

Mr McBRIDE:

– No, but deferments are granted usually because of seasonal occupations or for other reasons of that kind. Even although training has been deferred for say six months or eight months, a youth may still apply for a further deferment, and if he can convince the magistrate that his application is justified, he will secure a further deferment. On the question of the right of a trainee to brief counsel, of course, in a court of summary jurisdiction, he has that right, and if the lad whom the honorable member for East Sydney has in mind did not exercise that right, it was his own choice.

Mr Ward:

– He had not the means to say counsel.

Mr McBRIDE:

– I thought that the honorable member wanted to know whether a trainee had the right to have counsel appear for him.

Mr Ward:

– In this case, even if the trainee had the right, he could not afford to pay counsel.

Mr McBRIDE:

– I cannot recall the exact circumstances of the case, but the view that the department took was that the trainee had presented his case before the court, and that the magistrate had decided upon the evidence that a postponment of service was not justified. The general policy of the department ha? been not to interfere with decisions given by the courts.

Mr Ward:

– Could a transcript of the evidence be made available to honorable members? I do not think that the whole of the facts were before the court.I do not think that the boy was permitted to state them.

Mr McBRIDE:

– I shall examine that matter and ascertain whether a transcript can be made available.

Question resolved in the affirmative.

page 377

PAPERS

The following papers were pre sented : -

Coal Industry Act - Joint Coal Board -

Fourth Annual Report and financial accounts, for year 1950-51.

Report of the Auditor -General of the Commonwealth on the Accounts of the Joint Coal Board, for year 1950-51.

Services Trust Funds Act -

Royal Australian Air Force Welfare Trust Fund - Report for year 1950-51.

Services Canteens Trust Fund - Annual Report for period 1st July, 1950, to 31st December, 1951.

House adjourned at 1.1.22 p.m.

page 377

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Defence Contracts

Mr Curtin:

n asked the Minister for Supply, upon notice -

  1. Is it a fact that over the past eleven months Overseas Corporation and its subsidiaries have obtained £1,000,000 worth of orders for goods to be supplied to the defence services 1
  2. Is an item of £500,000 for tubular armchairs, card tables, &c, for the Department of the Army included in these contracts?
  3. If so, why were all the contracts let to one big group of companies?
  4. Is it considered that, having regard to the need for economy, it was necessary to spend such a vast sum of money for expensive and seemingly unnecessary furniture and equipment?
Mr Beale:
LP

– The answers to the honorable member’s questions are as follows : -

  1. No. During the financial year 1951-52 contracts to the value of £498,000 were allotted to Overseas Corporation and several other companies believed to be associated with them.
  2. Tubular furniture valued at £374,000 was ordered from National Art Metal Company, of Sydney. This furniture which waa for the Department of the Army included armchairs, settees, general purpose chairs, wagon trays and four types of small tables.
  3. With one minor exception involving proprietary lines of aircraft parts not available elsewhere all these contracts were let as a result of the invitation of public tenders. They were awarded to the lowest tenderer offering goods to specification and able to meet the delivery requirements of the Army.
  4. I do not agree that the furniture was either expensive or unnecessary. The articles were for the Department of tho Army, which required them for use in connexion with their training scheme. This portion of the question appears to be one more appropriately for answer by the Minister for the Army. My department is responsible only for the procurement of goods in the quantities and of the types demanded by client departments.

Motor Vehicles

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Minister for the Interior, upon notice -

  1. How many new Chevrolet sedans has the Government taken delivery of during the past vear?
  2. Where are these cars stationed?
  3. Is one of these cars stationed in Melbourne for his use; if so, why?
  4. What has been the cost of providing him with car transport since the 1st January, 1952 ?
Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– The answers to the honorable member’s questions are as follows : -

  1. Six.
  2. Five in Canberra, one in Melbourne.
  3. Yes. The Humber-Pullman car originally allotted me in Melbourne is part of several such cars ordered for Labour Ministers. I asked if it would be possible to allot me a smaller car that was less costly tn run and easier to manipulate in city traffic. I was given a Chevrolet, which loft me stranded on several occasions, and which, apparently, the mechanics at the depot could not repair. The new Chevrolet was sent from Canberra for my use when in Melbourne and for general government work when not required by me.
  4. I welcome at any time any questions on privileges, but the answer to this question would entail considerable checking of records in all States. If the Leader of the Opposition desires such detailed information about his own, mine or any other costs, I will endeavour to obtain same. About 90 per cent, or more of my car mileage will have been in Victoria, where for the last six months it has been approximately 3,250 miles, or a little more than twice one trip from Sydney to Brisbane and return.

Telephone Services

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Prime Minister, upon notice -

  1. Does a Minister pay for the rental of his own private telephone and for calls?
  2. What is tho practice in respect of public servants wlm are required to have a telephone installed in their homes for official purposes?
Mr Menzies:
Prime Minister · KOOYONG, VICTORIA · LP

– The answers to the honorable member’s questions are as follows : -

  1. Generally rent and the cost of calls for the private telephone of Ministers are paid by the Commonwealth. T understand that this practice was in operation during the term of office of the preceding Government. However, some Ministers of this Government have insisted that they be placed on the same basis as officials.
  2. Where with departmental authority an official telephone has been installed in the private residence of an officer, the department pays the rent and calls in the first instance and the officer then pays to the department the cost of 80 per cent, of local calls and the cost of all trunk-line calls except those which arc official, of which a record is kent. If official local calls exceed 20 ner cent., officers are entitled to a refund of the excess cost on presenting a detailed record.

Electoral

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Prime Minister, upon notice -

Will he state whether the Government intends to hold an election for the House of Representatives concurrently with the election for the Senate due to be held next year?

Mr Menzies:
LP

– We have no such intention.

Sir Percy Spender

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Prime Minister, upon notice -

  1. Is it a fact that the Australian Ambassador to. the United States of America, S1t Percy Spender, stated that Australia and Nen”

Zealand were ready to contribute 1,000,000 fighting men to aid the defence of America, Japan or the Philippines in the event of Soviet aggression in the Pacific?

  1. If so, will he give full details of the arrangements entered into and indicate whether the Government intends seeking parliamentary approval for its action?
  2. If the Ambassador has been misunderstood, will the Prime Minister take steps to furnish to each member of the Parliament a copy of the complete statement released to the press by the Ambassador?
Mr Menzies:
LP

– The answers to the honorable member’s questions are as follows : -

  1. The Ambassador in his address to the Commonwealth Club at San Francisco did not state that Australia and New Zealand were ready to contribute 1,000,000 fighting men to a id the defence of America, Japan or the Philippines in the event of Soviet aggression in the Pacific.
  2. No such arrangement has been entered into.
  3. The full text of the Ambassador’s speech is not yet available in Canberra. It is understood that the Ambassador did not speak from a prepared text.

Canberra.

Mr.Ward asked the Minister for the Interior, upon notice -

Has any room at the Hotel Kurrajong been refurnished and fitted with wall-to-wall carpet since he assumed office?

If so, was there any special reason for this action and what was the cost to the taxpayers?

In what way do the furnishings provided in this room differ from those in the rooms available to honorable members and the general public?

What is the rental charged for any such room and, does it differ from the usual charges for accommodation at the hotel?

Is it available for letting to the general public?

On how many nights has the room been occupied since it was refurnished?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

s. - The answers to the honorable member’s questions are as follows : -

  1. . Yes. There are 25 rooms with walltowall carpets, and 75per cent. of the rooms in the hotel have only a narrow strip uncarpeted.
  2. No. The hotel is continuously doing repairsand maintenance, particularly in the older portions. 3.If the question refers to the room I occupy.Ineither asked for norhaveI received any special treatment as far as I know.
  3. The ordinary rates.
  4. Again, if the question refers to the room allocated to me, it is not let to the general public in the same way that rooms occupied by Ministers in the previous Government were retained for them. If it is required for such purposes 1 could have no objection.
  5. I should think on only about four weeks this year have I not been in residence in Canberra for some period of the week. 1 do not propose to waste the time of the staff in searching back records. If the Leader ofthe Opposition requires any information about any Minister’s or member’s bills or the time spent in Canberra, it will be made available to him.

Commonwealth Bank

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

  1. Was the recent decision of the Commonwealth Bank and the private banks to increase interest rates considered by the Commonwealth Bank Board?
  2. Did the proposal originate from the private tradingbanks; if not, did these banks support the proposal?
  3. If the decision was endorsed by the Commonwealth Bank Board, will he advise the Parliament whether Messrs. W. L. Sanderson. J. W. Fletcher, G. H. Grimwade and A. E. Symons voted for the increase at theboard meeting?
Sir Arthur Fadden:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The answers to the honorable member’s questions are as follows : -

  1. Yes.
  2. There have been proposals from time to time from many sources for an increase in interest rates, but I do not think any one could say precisely where the idea of an increase in the rate of interest “ originated “.
  3. In accordance with normal practice, the proceedings of the board are confidential and cannot be disclosed.
Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

Will he endeavour to have a branch of the. Commonwealth Bank established at Thebarton. South Australia?

Sir Arthur Fadden:
CP

– The answer to the honorable member’s question is as follows : -

The Commonwealth Bank has advised that it has already investigated the establishment of a branch at Thebarton,but that because there are many other places through the Commonwealth with greater claims for branch representation some considerable time must elapse before opening there can be considered . There are, however, three Commonwealth Savings Bank agencies operating in the district.

International Monetary Fund

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice -

  1. What, is the International Monetary fund’s definition of the term “ chronic and persistent unemployment” as used in the fund’s ruling which permits member countries to correct a “fundamental disequilibrium”?
  2. What is the official definition of the term “ fundamental disequilibrium “?
  3. Is Australia at present suffering from “chronic and persistent unemployment” or “ fundamental disequilibrium”?
  4. If so, what action is the Government taking to rectify the matter?
Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : - 1 to 4. There is no official fund definition of the term “ chronic and persistent unemployment “ or of the term “fundamental disequilibrium”.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice: -

  1. What amount of dollars has Australia purchased from the International Monetary Fund each year since 1048?
  2. Has Australia purchased its full quota of dollars from the International Monetary Fund?
  3. If not, what is the amount standing to Australia’s credit?
Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : -

  1. Australia purchased 20,000,000 dollars from the International Monetary Fund on the 16th October, 1949. On the 24th April, 1952, the fund agreed to allow Australia to purchase a further 30,000,000 dollars at a date to be arranged, but not later than the 30th September, 1952. The date for this purchase has not vet been fixed.
  2. No.
  3. Australia’s “ quota “ in the International Monetary Fund amounts to 200,000,000 dollars. Purchases of currencies from the. fund, however, can be made only in accordance with the conditions governing the use of the fund’s resources. One of the most important of these conditions is that purchases should not cause the fund’s holdings of the purchasing member’s currency to increase by more than 25 per cent. of its quota during a twelve-month period nor to exceed 200 per cent. of its quota.

Dollar Loans

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice: -

  1. Did private banking interests in America contribute anything towards the two dollar loans which the Prime Minister negotiated on behalf of Australia?
  2. What were the terms of interest, brokerage, commission and other charges attached to each loan?
  3. Did any other country get more favorable terms (including the rate of interest) than Australia for loans negotiated at about the same time?
  4. If so, what were the countries and what were the terms of the loans made a vailable to them?
  5. Was either of these loans subject to any conditions which have not yet been revealed to Parliament and the Australian public; if so, what were they ?
Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : -

  1. No.
  2. Interest on the 100,000 000 dollars loan of 1950 amounts to 41/4 per cent. per annum. This interest charge includes 1 per cent. commission required by the articles of agreement of the International Bank for the purpose of building up the reserves of the bank. Interest on the 50,000,000 dollars loan of 1952 amounts to 43/4 per cent. This charge also includes 1 per cent. commission. The higher rate of interest on the 1952 loan is due to the fact that since 1050 there has been a general rise in interest rates in the United States and the International Bank itself has to pay higher interest charges to raise funds for lending to member countries. In addition, on each loan there is a commitment charge of3/4 per cent. per annum on the amount of loans standing undrawn from time to time. 3 and 4. - There was a variety of loans granted by the bank at about the same time as the Australian loans were negotiated both in 1950 and 1952. Terms of these loans (including rates of interest) naturally differed according to the periods of the loans and other relevant considerations. Taking these variations into account, the terms obtained by Australia were no less favorable than those obtained by other countries.
  3. No.

Government Loans and Finance

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

n asked the Treasurer, upon notice: -

  1. Will he state whether the Government is using bank credit and whether it intends to do so to meet its financial obligations?
  2. If the answer is in the affirmative, will he state - (a) to what extent this form of finance has been used, or is likely to be used in the immediate future; (b) for what period of time this method of finance will be used: and (c) whether the Government intends using bank credits to finance public works?
Sir Arthur Fadden:
CP

– The answers to the honorable member’s questions are as follows : -

In my budget speech, delivered on the 6th August, 1952, I stated that the Commonwealth would this year meet the whole of its expenditure, including its own capital works and services, out of the revenue of the year, after making substantial tax reductions.

Cite as: Australia, House of Representatives, Debates, 14 August 1952, viewed 22 October 2017, <http://historichansard.net/hofreps/1952/19520814_reps_20_218/>.

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